Question Details

Total net operating capital is equal to net fixed assets 



True or false:
1.	The income statement shows the difference between a firm's income and its costsi.e., its profitsduring a specified period of time. However, not all reported income comes in the form or cash, and reported costs likewise may not correctly reflect cash outlays. Therefore, there may be a substantial difference between a firm's reported profits and its actual cash flow for the same period.


	2.	Net operating working capital is equal to operating current assets minus operating current liabilities.


	3.	Total net operating capital is equal to net fixed assets.

	4.	Net operating profit after taxes (NOPAT) is the amount of net income a company would generate from its operations if it had no interest income or interest expense.


	5.	The fact that 70% of the interest income received by a corporation is excluded from its taxable income encourages firms to use more debt financing than they would in the absence of this tax law provision.




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