A Project's Operating Cash Flow Will Increase When

question 93

Multiple Choice

A project's operating cash flow will increase when:

• A) The depreciation expense increases.
• B) The sales projections are lowered.
• C) The interest expense is lowered.
• D) The net working capital requirement increases.
• E) The earnings before interest and taxes decreases.

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Definitions:

Securities

Assets which embody either ownership in a stock of a company available to the public, a lending relationship with a government or corporate entity through bonds, or claims to ownership via options.

Warrant Holder

An individual or entity that owns a warrant, giving them the right, but not the obligation, to buy a company's stock at a specified price before the warrant expires.

Cash Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Underlying Stock

The stock that is the basis for a particular derivatives contract, such as options or futures.