Persuasive techniques today are subtler and more misleading than of the past
Indicate whether the statement is true or false
True
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The statement of cash flows is notuseful for
a. planning future investing and financing activities b. determining a company's ability to pay its debts c. determining a company's ability to pay dividends d. calculating the net worth of a company
The acid-test ratio differs from the current ratio in that it
a. represents the amount of cash on hand instead of the amount of working capital. b. excludes inventories and accounts receivable from the numerator of the fraction because of obsolescence and possible nonpayment. c. is a stricter test of a company's ability to pay its current debts as they are due. d. signals the need to liquidate marketable securities when it drops below 5 to 1.
A negative value of z indicates that
A. the number of standard deviations of an observation is to the right of the mean. B. the number of standard deviations of an observation is to the left of the mean. C. a mistake has been made in computations, since z cannot be negative. D. the data has a negative mean.
Which of the following statements is true regarding a replacement decision??
A. ?The benefits resulting from the new investment is treated as an inflow. B. ?The net cash flow from the sale of an old equipment is treated as an outflow at t = 0 (initial investment outlay). C. ?The depreciation expenses on the new equipment is treated as an outflow. D. ?Any loss on the sale of the old equipment is multiplied by the tax rate and is treated as an outflow at t = 0 (initial investment outlay). E. ?An increase in the net working capital is treated as an inflow when the project begins (initial investment outlay) and as an outflow when the project ends (terminal cash flow).