Which of the Following Adjustments Is NOT Correct If You

question 87

Multiple Choice

Which of the following adjustments is NOT correct if you are trying to calculate cash flow from financing activities?

• A)Add dividends paid
• B)Add any increase in long-term borrowing
• C)Add any increase in short-term borrowing
• D)Add proceeds from the sale of stock

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Definitions:

Real Rates

Interest rates or rates of return that have been adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment.

Indenture

A formal legal agreement, contract, or document, especially one with specific pledges or terms.

Bond Creditors

Creditors who have lent money to a company or government by purchasing bonds issued by the entity.

Written Agreement

A formal document detailing the terms and conditions of a contract agreed upon by two or more parties.