Because the Presence of a Warranty for a Good Is

question 79

Multiple Choice

Because the presence of a warranty for a good is a signal that the good is of high quality,

• A) consumers are willing and able to pay more for a good that carries a warranty.
• B) consumers are willing to buy goods if and only if the goods come with warranties.
• C) producers do not need to charge extra for warranties.
• D) producers can use warranties to sort out high-risk customers.
• E) producers must make warranties available on all goods.

---

Definitions:

Financing Activities

Actions that result in changes to the size and composition of the equity capital or borrowings of a company.

Cash Flows

Cash flows represent the movement of money into and out of a business, crucial for understanding liquidity, viability, and overall financial health.

Indirect Method

A way to present the cash flow statement, showing operating cash flows based on differences in non-cash accounts on the balance sheet.

Operating Activities

Activities related to the core business functions of a company, including production, sales, and delivery of its products or services.