In a Statement of Cash Flows, Which of the Following

question 50

Multiple Choice

In a statement of cash flows, which of the following events would be classified as a financing activity?

• A)purchase of a trading security
• B)payment of interest on a loan
• C)payment of cash dividends to stockholders
• D)all of these

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Definitions:

Cost Function

A mathematical relationship that describes how the costs incurred by a firm vary with the level of output or activity.

Output

Refers to the quantity of products or services produced by a business, industry, or economy.

Marginal Cost

The increase in total cost that arises from an increase in production by one additional unit.

Average Variable Cost

The total variable cost of production divided by the quantity of output produced, representing the average cost of each unit of output when only variable costs are considered.