Answer true or false to the follwoing statement, and explain “ Purchasing Power Parity (PPP) theory fails to explain the facts.”

Using common-size balance sheet percentages to project individual assets, liabilities, or shareholders' equity has all of the following shortcomings except:  a. Individual assets, liabilities, and shareholders' equity are independent of each other.     b. The common-size percentages do not permit the analyst to easily change the assumptions about the future behavior of an individual asset or liability.     c. Individual assets, liabilities, and shareholders' equity are not independent of each other.     d. If a company experiences changing proportions for investments in securities among its assets, other asset categories may show decreasing percentages in some years even though their dollar amounts are increasing.

Future costs that do not differ among the alternatives are not relevant in a decision. True or False True False

Provide some examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss.( Explain breifly)