Which of the Following Statements Is FALSE

question 67

Multiple Choice

Which of the following statements is FALSE?

• A) Because only the tax consequences of depreciation are relevant for free cash flow, we should use the depreciation expense that the firm will use for tax purposed in our free cash flow forecasts.
• B) A firm generally identifies its marginal tax rate by determining the tax bracket that it falls into based on its overall level of pre-tax income.
• C) Free Cash Flow = (Revenues - Costs) × (1 - τ_c) - Capital Expenditures - ΔNWC + τ_c × Depreciation.
• D) Net working capital is the difference between current liabilities and current assets.

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Definitions:

Interdependence

denotes a situation where two or more entities are reliant on each other for resources, information, or support, influencing each other’s outcomes.

Collaboration

The act of working together with others towards a common goal or objective, pooling resources and efforts.

Organizational Behavior

The study of how individuals and groups act within organizations and how these entities interact with their external environment.

Process Losses

The reduction in efficiency or effectiveness in a group or process due to problems such as miscommunication, conflict, or lack of coordination.