A Third Party Is Bound to the Principal Only When

question 60

True/False

A third party is bound to the principal only when he knows that the agent is acting for that principal.

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Definitions:

Negative Free Cash Flow

A situation where a company's cash outflows exceed its cash inflows during a specific period, indicating potential financial difficulties.

Free Cash Flow

The amount of cash generated by a company after accounting for operational expenses and capital expenditures.

Poor Performance

A situation where an individual or entity fails to meet established standards or expectations in terms of output, efficiency, or effectiveness.

Direct Method

A method of preparing the cash flow statement where actual cash flows from operating activities are listed, as opposed to the indirect method which adjusts net income for non-cash transactions.