42. The sale of corporate bonds held by the firm as a long-term investment would increase cash flows from investing activities on the statement of cash flows. True False 43. Paying dividends to common shareholders will not affect cash flows from financing activities. True False 44. The sale of a firm's securities is a source of funds, whereas the payment of dividends is a use of funds. True False 45. Depreciation is an accounting entry and does not involve a cash expense. True False 46. The use of depreciation is an attempt to allocate the past and future costs of an asset over its useful life. True False 47. Free cash flow is equal to cash flow from operating activities plus depreciation. True False 48. Free cash flow is to cash flow from operating activities minus necessary capital expenditures and normal dividend payments. True False 49. The guidelines of the International Accounting Standards Board have been successfully reconciled with the rules of the FASB in the United States as of 2010. True False 50. For corporations with low taxable income (less than $100,000), the effective tax rate can be as much as 40%. True False 51. Interest expense is deductible before taxes and therefore has an after-tax cost equal to the interest paid times (1 - tax rate). True False
42. The sale of corporate bonds held by the firm as a long-term investment would increase cash flows from investing activities on the statement of cash flows. True False 43. Paying dividends to common shareholders will not affect cash flows from financing activities. True False 44. The sale of a firm's securities is a source of funds, whereas the payment of dividends is a use of funds. True False 45. Depreciation is an accounting entry and does not involve a cash expense. True False 46. The use of depreciation is an attempt to allocate the past and future costs of an asset over its useful life. True False 47. Free cash flow is equal to cash flow from operating activities plus depreciation. True False 48. Free cash flow is to cash flow from operating activities minus necessary capital expenditures and normal dividend payments. True False 49. The guidelines of the International Accounting Standards Board have been successfully reconciled with the rules of the FASB in the United States as of 2010. True False 50. For corporations with low taxable income (less than $100,000), the effective tax rate can be as much as 40%. True False 51. Interest expense is deductible before taxes and therefore has an after-tax cost equal to the interest paid times (1 - tax rate). True False
Corporate-Finance-Foundations-Global-Edition-15th-Edition-Block,-Hirt,-Danielsen-Test-Bank.docx