1. Which of the following activities result in an increase in a firm’s cash?
a. pay dividends
b decrease accounts payable
c. repurchase of common stock
d. decreased fixed assets
2. An operating loss incurred by a corporation
a. Must be carried forward unless the company has had 2 loss years in a row.
b. Is carried back 2 years, then carried forward up to 20 years following the loss.
c. Is carried back 5 years and forward 3 years.
d. Cannot be used to reduce taxes in other years except with special permission from the IRS.
e. Can be carried back 3 years of forward 10 years whichever is more advantageous to the firm.