Which of the Following Statements Is FALSE

question 1

Multiple Choice

Which of the following statements is FALSE?

• A)Depreciation expenses have a positive impact on free cash flow.
• B)Free Cash Flow = (Revenues - Costs - Depreciation)× (1 - τ_c)- Capital Expenditures - ΔNWC + τ_c × Depreciation.
• C)The firm cannot use its earnings to buy goods,pay employees,fund new investments,or pay dividends to shareholders.
• D)The depreciation tax shield is the tax savings that results from the ability to deduct depreciation.

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Definitions:

Market Future

The projected development and trends within a specific market or industry in the forthcoming period.

Market Size

The total level of sales or potential sales for a product or service within a given market.

Bottom-Up Analysis

A strategy that starts with individual elements as the basis for building up to a complete financial analysis, strategy, or projection.

Top-Down Analysis

An analytical approach that starts with the broad overview of the global economy and then narrows down to specific sectors and companies to make investment decisions.