TRUE$/$FALSE $$ Please indicate $\text{'}$T$\text{'}$ if the statement is true or $\text{'}$F$\text{'}$ if the statement is false. $(4$ points each$)1.$ GAAP is the accounting profession's rule$-$setting body. $2.$ The income statement is a financial summary of a firm's operating results during a specified period while the balance sheet is a summary statement of a firm's financial position at a given point in time. $3.$ Long$-$term $($strategic$)$ financial plans lay out a company's financial actions and their anticipated effects over periods ranging from two to ten years. $4.$ Depreciation deductions, like any other business expenses, reduce the income that a firm reports on its income statement. $5.$ The time value of money is based on the belief that a dollar that will be received at some future date is worth more than a dollar today $6.$ An annuity due is a stream of equal cash flows with each cash flow arriving at the beginning of each period. $7.$ The return on an asset is the change in its value plus any cash distribution over a given period of time, expressed as a percentage of its ending value. $8.$ For a risk$-$averse investor, required return would decrease for an increase in risk. $9.$ The cost of capital reflects the cost of financing and is the minimum rate of return that a project must earn to increase firm value. $10.$ The weighted average cost of capital $($WACC$)$ reflects the expected average cost of the different forms of capital that a firm uses. $11.$ The purchase of additional physical facilities, such as additional property or a new factory, is an example of a capital expenditure. $12.$Capital budgeting is the process of evaluating and selecting short$-$term investments that are consistent with the firm's goal of maximizing owners' wealth.