TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false 1)...

 

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TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false 1) Financial forecasting is used to develop the exact future outcome, otherwise it is useless to a company. ( ) 2) Sales projections and the ability to accurately predict the future have a large impact on cash flow expectations. ( ) 3) Operating leverage emphasizes the impact of using fixed assets in the business. ( ) 4) The difference between variable cost and fixed cost is that the cost amount fluctuates differently based on how many units are sold. ( ) 5) Compared to a firm operating at 100% of capacity, firms that are operating at less than full capacity will require greater new external funds when sales increase ( ) 6) Financial leverage emphasizes the impact of using debt in the business ( ) 7) Degree of combined leverage considers the impact of a change in volume on the change in operating income ( ) 8) Degree of operating leverage should be computed only over a profitable range of business operations ( ) 9) For high-internal rate of return investments, it is perfectly acceptable to assume that reinvestment will occur at an equally high, if not higher, rate ( ) 10) The internal rate of return (IRR) measures the profitability of investments as a return percentage. ( ) TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false 1) Financial forecasting is used to develop the exact future outcome, otherwise it is useless to a company. ( ) 2) Sales projections and the ability to accurately predict the future have a large impact on cash flow expectations. ( ) 3) Operating leverage emphasizes the impact of using fixed assets in the business. ( ) 4) The difference between variable cost and fixed cost is that the cost amount fluctuates differently based on how many units are sold. ( ) 5) Compared to a firm operating at 100% of capacity, firms that are operating at less than full capacity will require greater new external funds when sales increase ( ) 6) Financial leverage emphasizes the impact of using debt in the business ( ) 7) Degree of combined leverage considers the impact of a change in volume on the change in operating income ( ) 8) Degree of operating leverage should be computed only over a profitable range of business operations ( ) 9) For high-internal rate of return investments, it is perfectly acceptable to assume that reinvestment will occur at an equally high, if not higher, rate ( ) 10) The internal rate of return (IRR) measures the profitability of investments as a return percentage. ( )

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