Please give me the correct answer:

Lucy’s Music Emporium purchased $50 million in fixedassets in January and their accountant told them that they wouldhave to depreciate the assets over 20 years (they use the samedepreciation calculations for shareholder reporting and income taxpurposes). In December they learned that their accountant did nothave a college degree and fired him. They hired a new accountantwith a college degree and she told them that they could depreciatethe assets over 15 years. How would the new depreciation assumptionaffect the company's financial statements relative to the oldassumption?

1. The firm's EBIT would increase.

2. The firm's cash position would increase, all else heldequal.

3. The firm's reported earnings per share would increase.

4. The firm's reported net fixed assets would increase.

5. The firm's net liabilities would increase.

Which of the following statement isincorrect?

1. Most of the answers are correct.

2. Total net operating capital = NOWC + Operating long-termassets.

3. Cost of goods sold (COGS) are the revenues less any discountsor returns.

4. An S corporation is a small corporation which, underSubchapter S of the Internal Revenue Code, elects to be taxed as aproprietorship or a partnership yet retains limited liability andother benefits of the corporate form of organization.

5. Accounts receivable arises when a firm sells its products tocustomers but does not demand immediate payment, and the customersthen have obligations to make the payment at a later time, usuallyless than a year.

Which of the following statement isincorrect?

1. Most of the answers are correct.

2. A firm’s balance sheet is a statement of the firm’s financialposition at a specific point in time.

3. Retained earnings is the portion of the firm’s earnings thathave been saved rather than paid out as dividends.

4. Operating long-term liabilities are the liabilities that area natural consequence of the firm’s operations, such as accountspayable and accruals and include notes payable or any othershort-term debt that charges interest.

5. S corporations are businesses that have the limited-liabilitybenefits of the corporate form of organization yet are taxed aspartnerships or proprietorships.

Which of the following statement isincorrect?

1. A capital gain occurs when an asset is sold for less than itsbook value.

2. The income statement reports the results of operations over aperiod of time, and it shows earnings per share as its “bottomline.”

3. The LIFO (last-in, first-out) method assumes that the itemsmost recently placed in inventory are the first ones used inproduction.

4. Most of the answers are correct.

5. On a typical balance sheet, cash, short-term investments,accounts receivable, and inventories are listed as current assetsbecause those items are expected to converted into cash within ayear.

Jessie's Bobcat Rentals' operations provided a negativenet cash flow last year, yet the cash shown on its balance sheetincreased. Which of the following statements could explain theincrease in cash, assuming the company's financial statements wereprepared under generally accepted accountingprinciples?

1. The company sold some of its fixed assets.

2. The company retired a large amount of its long-term debt.

3. The company dramatically increased its capitalexpenditures.

4. The company repurchased some of its common stock.

5. The company had high depreciation expenses.

Other things held constant, which of the followingactions would increase the amount of cash on a company's balancesheet?

1. The company pays a dividend.

2. The company repurchases common stock.

3. The company gives customers more time to pay their bills.

4. The company issues new common stock.

5. The company purchases a new piece of equipment.

Which of the following statement iscorrect?

1. All the answers are incorrect.

2. The income statement begins with assets, which are the“things” the company owns.

3. Cost of goods sold (COGS) reflects the estimated costs of theassets that wear out in producing goods and services.

4. Gross income is defined as taxable income less a set ofexemptions and deductions which are spelled out in the instructionsto the tax forms individuals must file.

5. The fundamental value of a company to its investors dependson the present value of its expected future FCFs which arediscounted at the company’s weighted average cost of capital(WACC).

Olivia Hardison, CFO of Impact United Athletic Designs,plans to have the company issue $500 million of new common stockand use the proceeds to pay off some of its outstanding bonds.Assume that the company, which does not pay any dividends, takesthis action, and that total assets, operating income (EBIT), andits tax rate all remain constant. Which of the following wouldoccur?

1. The company would have to pay less taxes.

2. The company's net income would increase.

3. The company's taxable income would fall.

4. The company would have less common equity than before.

5. The company's interest expense would remain constant.