A. TRUE / FALSE QUESTIONS Write either "True" or "False" on the blank preceding each question. 1. For a common stock that has a variable dividend growth rate in its initial years, its "Horizon Value is calculated at the point in time when its dividend begins growing at a constant annual rate. 2. With "D" being the dollar value of a dividend payment and "g" being the expected annual growth rate in the dividend, the following formula can be used to calculate the expected dollar value of the stock's dividend payment for the current year: D (Current Year) X (1 + g) = D (Previous Year) 3. When calculating the annual depreciation expense for equipment using the straight-line method, any salvage value expected to be received when the equipment is sold at the end of its useful life can be excluded or ignored in the calculation. 4. In a cost estimation scenario for a new equipment purchase, the "Depreciation Expense" is a constant, same value in each year of the new equipment's estimated useful life (when the straight-line depreciation method is used), as "Depreciation Expense" is a fixed cost. 5. In a cost estimation scenario for a new equipment purchase the following formula can be used to calculate the estimated "Income Tax Expense" for each year of the analysis Income Tax Expense = Revenue Income Tax Rate