Test Bank for Fundamentals of Corporate Finance Canadian Canadian 8th Edition by Ross

1. Patents on new anti-cholesterol drug are considered intangible fixed assets. True False 2. The financial statement summarizing the value of a firm's equity on a particular date is the statement of comprehensive income. True False 3. According to generally accepted accounting principles (GAAP), assets are generally shown on financial statements at the higher of current market value or historical cost. True False 4. Noncash items refer to expenses charged against revenues that do not directly affect cash flow. True False 5. If a firm's cash flow to stockholders is negative, then total dividends must have exceeded the value of net new equity sold by the firm during the year. True False 6. Conceptually, capital cost allowance (CCA) is equivalent to depreciation True False 7. A firm's marginal tax rate may differ from its average tax rate. However, it is the average tax rate that is relevant for financial decision-making purposes. True False 8. The financial statement summarizing a firm's performance over a period of time is the statement of cash flows True False 9. The difference between a firm's current assets and its current liabilities is called net working capital True False 10. Net income divided by the total number of outstanding shares is referred to as the profit margin. True False 11. The financial statement showing a firm's accounting value on a particular date is the: A. Statement of comprehensive income. B. Statement of financial position. C. Statement of cash flows. D. Tax reconciliation statement. E. Shareholders' equity sheet. 12. A current asset is: A. An item currently owned by the firm. B. An item that the firm expects to own within the next year. C. An item currently owned by the firm that will convert to cash within the next 12 months. D. The amount of cash on hand the firm currently shows on its st