1 .Given a financial manager's preference for faster receipt of cash flows, a longer depreciable life is preferred to a shorter one.
True
False
2. The statement of cash flows allows the financial manager and other interested parties to analyze a firm's past and possibly future profitability.
True
False
3. The sales forecast and various forms of operating and financial data are the key outputs of the short-run (operating) financial planning.
True
False
4. Since the percentage-of-sales method assumes that all the firm's costs and expenses are variable, it tends to understate profits when sales are increasing and overstate profits when sales are decreasing.
True
False
5. In the development of pro forma statements, a firm that requires external funds means that its projected level of cash is in excess of its needs and that funds would therefore be available for repaying debt, repurchasing stock, or increasing the dividend to stockholders.
True
False
6. A weakness of the percent-of-sales method of preparing a pro forma income statement is the assumption that the firm's past financial condition is an accurate predictor of its future
True or false