1. An expense that lowers net income but does not affect a firm's cash flow is referred to as a noncash item. (T/F)
2. Book value is equal to the initial cost minus the depreciation to date. (T/F)
3. All else equal, a decrease in net working capital will increase owners' equity. (T/F)
4. A decrease in net working capital for the period is a cash inflow for the firm. (T/F)
5. Operating cash flow is equal to: Cash flow from assets + Net capital spending + Change in net working capital. (T/F)
6. The matching principle advocates recording costs when the liability for those costs occurs. (T/F)
7. When net new borrowings are subtracted from the interest payments a firm pays to its creditors the result is called the cash flow to creditors. (T/F)