The Amortization of Patents Should Be Presented in a Statement

question 19

Multiple Choice

The amortization of patents should be presented in a statement of cash flows prepared using the indirect method as a(n)

• A) inflow and outflow of cash.
• B) outflow of cash.
• C) addition to net income in the adjustments to reconcile net income to cash from operating activities.
• D) deduction from net income in the adjustments to reconcile net income to cash from operating activities.

Comprehend the assumptions and limitations of the Capital Asset Pricing Model (CAPM).

Interpret beta values and their indication of a security's systematic risk level.

Understand the effects of portfolio diversification on risk.

Identify the impact of inflation and changes in risk aversion on the SML.