Which of the Following Statements Is True

question 47

Multiple Choice

Which of the following statements is true?

• A) The calculation of free cash flow does not include the impact of income taxes.
• B) Accounting earnings are an unreliable measure of the costs and benefits of a project.
• C) The idea that we can evaluate the cash flows from a project independently of the cash flows for the firm is known as the incremental principle.
• D) Depreciation expense should not be included in the calculation of incremental net operating profits after-tax.

---

Definitions:

Social Responsibility

The obligation of an organization to act in ways that benefit society at large, including ethical practices, environmentally sustainable operations, and community engagement.

Stakeholder Obligations

Responsibilities or duties a company owes to its stakeholders, including customers, employees, investors, and communities.

Pricing Objectives

Goals that a company aims to achieve through its pricing strategies, such as maximizing profit, increasing market share, or discouraging competition.

Survival

The act of continuing to live or exist, often in spite of an accident, ordeal, or challenging circumstances.