Question 2 Modified True or False (T means TRUE and F means FALSE) 51. The concept of free cash flow might also be used in cash flow forecasts. 52. Free cash flow is the amount of surplus cash flow (or the cash flow deficit) after allowing for all cash payments that are essential and discretionary. $3. Free cash flow is the amount of cash flow that management are able to use at their discretion for any purpose. $4. Free cash flow does not have an exact definition, and there may be differences in assumptions about essential cash flows. However, a useful definition of free cash flow is as follows. OT, T. T. F O FT. T. F O T. F. T. T OFFFF OT. F. T. T GEETTQuestion 4 Modified True or False ( T means TRUE and F means FALSE) S1. The bond markets are not accessible to small companies. 52. Money markets are for trading in financial instruments with a much shorter maturity. As a general guide, the maturity of instruments in the money markets is not usually longer than two years, but the maturity of many transactions and instruments is less than three months, even 'overnight". 53. The financial markets bring together organisations and individuals wishing to obtain finance and organisations and individuals wishing to invest. 54. Capital markets are financial markets for primary issues and secondary market trading in long-term investments: equities and bonds. O FT. T. F OT. T T. F OT. F. T. T OFF.FF OFF TTQuestion 5 Modified True or False ( T means TRUE and F means FALSE) 51. Many companies will not clearly fit into any one industry. S2.A financial service uses its best judgment as to which industry the firm best fits. 53. The analysis of an entity's financial statements can be more meaningful if the results are compared with industry averages and with results of competitors. 54.A company comparison should not be made with industry averages if the company does not clearly fit into any one industry. OT. T. T. T OT. T. F. F OT , T. T. F OF. F. T. T OF. T. T. F OFF. F. F