Which of the Following Statements Is False

question 88

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 result from the ability to deduct depreciation.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering creativity and problem-solving.

Mental Set

A framework or mindset that shapes an individual's approach to problem-solving and can sometimes limit the exploration of alternative solutions.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, associated with decision making, cognitive behavior, and personality expression.

Problem Structuring

Involves identifying the key elements and relationships in a problem to better understand and address it.