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QUESTION 6 Which of the following is correct regarding the payment of dividends by a corporation? O a. They Dividends are paid out of net after-tax income and thus are not tax deductible by the corporation. O b. Dividends are paid out of net after-tax income and thus are tax deductible by the corporation in the following tax year. O c. that it Dividends are tax deductible by the corporation once they have been declared. O d. If dividends are paid after-tax bond interest they are tax deductible by the corporation. QUESTION 7 Last year Roussakis Company's operations provided a negative net cash flow, yet the cash shown on its balance sheet increased. What action could explain the increase in cash, assuming the company's financial statements were prepared under generally accepted accounting principles? O a. The company repurchased some of its common stock. O b. The company sold some of its fixed assets. O c. The company had high depreciation expenses. Od. The company retired a large amount of its long-term debt. QUESTION 10 If a company's accounts receivable turnover is increasing, the average collection period is going down could be moving in either direction is going up by a significant amount is going up slightly QUESTION 8 Analysts who follow Howe Industries recently noted that, relative to the previous year, the company's operating net cash flow increased, yet cash as reported on the balance sheet decreased. Which factor could explain this situation? O a. The company cut its dividend. b. The company sold a division and received cash in return. O c. The company made a large investment in a profitable new plant. Od. The company issued new long-term debt. QUESTION 9 Which statement regarding the statement of cash flows is correct? O a. The statement of cash flows reflects cash flows from operations, but it does not reflect the effects of buying or selling fixed assets. b. The statement of cash flows shows how much the firm's cashthe total of currency, bank deposits, and short-term liquid securities (or cash equivalents)increased or decreased during a given year. C. The statement of cash flows reflects cash flows from operations and from borrowings, but it does not reflect cash obtained by selling new common stock. Od. The statement of cash flows reflects cash flows from continuing operations, but it does not reflect the effects of changes in working capital

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