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:

Demand Pattern

The trend or repetitive sequence observed in consumer demand over a certain period, which can be predictable or may vary seasonally, cyclically, or irregularly.

Product Margin

A financial metric that calculates the difference between the sales revenue generated by a product and the costs associated with its production.

Peak Demand

The highest level of consumption or requirement for a product or service, often challenging to meet and requiring careful planning and resource allocation.

Forward Buy

A purchasing strategy where a buyer purchases more inventory than currently needed at a lower price, anticipating future price increases or supply shortages.