Which of the Following Adjustments to Convert Net Income to Net

question 41

Multiple Choice

Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect? $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\quad$ $\quad$ $\quad$ Add to Net Income $\quad$ $\quad$ Deduct from Net Income

• A) \(\begin{array}{llcc}
• \text {Accounts Receivable}& \text {decrease}&&&&\text {increase}
• \end{array}\)
• B) \(\begin{array}{llcc}
• \text {Prepaid Expenses}& &\text {increase}&&&&&\text {decrease}
• \end{array}\)
• C) \(\begin{array}{llcc}
• \text {Inventory }&&&&& &\text {decrease}&&&&\text {increase}
• \end{array}\)
• D) \(\begin{array}{llcc}
• \text {Accounts Payable }&&& \text {increase}&&&\text {decrease}
• \end{array}\)

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Definitions:

Dividend Yield

A measurement of the annual dividends a firm issues in relation to its share price.

Capital Gains Yield

The price appreciation component of the total return from an investment, typically expressed as a percentage.

Dividend Models

Mathematical formulations that aim to estimate the real value of a company’s stock based on its expected dividend payments and growth.

Financial Asset

Any asset that is cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset, or a contractual right to exchange financial instruments on potentially favorable terms.