financial statements8

financial statements8 - less capital. c. One drawback of...

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less capital. c. One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free. d. Statements a and b are correct. e. Statements a and c are correct. Medium: Changes in depreciation Answer: d Diff: M i . Solo Company has been depreciating its fixed assets over 15 years. It is now clear that these assets will only last a total of 10 years. Solo’s accountants have encouraged the firm to revise its annual depreciation to reflect this new information. Which of the following would occur as a result of this change? a. The company’s earnings per share would decrease. b. The company’s cash position would increase. c. The company’s EBIT would increase. d. Statements a and b are correct. e. All of the statements above are correct. Changes in depreciation Answer: d Diff: M ii . A start-up firm is making an initial investment in new plant and equipment. Currently, equipment is depreciated on a straight-line basis over 10 years. Assume that Congress is considering
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financial statements8 - less capital. c. One drawback of...

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