What Are the Two Most Important Possible Uses for Cash

question 4

Multiple Choice

What are the two most important possible uses for cash created by a firm's operations ?

• A) Purchase of new shares
• B) Selling assets to investors
• C) Reinvestment
• D) Cash return to investors

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Definitions:

Peak-Period Requirements

The maximum capacity or resources needed to meet demand during the busiest or peak times.

Fixed Costs

Fixed costs are expenses that remain unchanged regardless of the level of production or sales, foundational to a company's financial structure.

Variable Costs

Outlays that directly correspond to production levels, encompassing costs for raw materials and direct labor.

Required Rate Of Return

The minimum percentage return an investor expects to achieve on an investment to consider it worthwhile.