Which of the Following Statements Is True? Users Want to Assess

question 51

Multiple Choice

Which of the following statements is true? Users want to assess if:

• A)cash from financing activities is sufficient to cover investing activities in the long run.
• B)cash from continuing operations is sufficient to cover investing and financing activities in the long run.
• C)cash from continuing operations is sufficient to cover investing activities in the long run.
• D)cash from investing activities is sufficient to cover financing activities in the long run.

---

Definitions:

Fixed Costs

Expenses that do not change in relation to the volume of production or sales, such as rent, salaries, and insurance premiums.

Fixed Expenses

Costs that do not change with the level of company activity or production volume, such as rent or salaries.

Unit Contribution Margin

The profit per unit sold, calculated by subtracting the variable cost per unit from the selling price per unit.

Break-Even Point

The level of production or sales at which total costs equal total revenue, meaning the business neither earns nor loses money.