Question 3

True or False

a) When preparing a sources and uses of funds statement, an increase in cash represents a use of funds.

True

False

b) The relevant cash flows for a project will always include the reduction in taxes attributable to the projects depreciation charges.

True

False

c) When it comes to working capital policy, the greater the dispersion of the probability distribution of possible net cash flows, the smaller the margin of safety that management will wish to provide.

True

False

d) The sources and uses of funds statement deals with accounting flows of funds and not necessarily cash flows.

True

False

e) All of the firms investments and claims against those investments are defined as funds.

True

False