Last Year Aldrin Co

question 14

Multiple Choice

Last year Aldrin Co. had negative net cash flow, yet its cash on the balance sheet increased. What could explain these events?

• A) Aldrin issued long-term debt.
• B) Aldrin repurchased some of its common stock.
• C) Aldrin sold some of its assets.
• D) Statements a and b are correct.
• E) Statements a and c are correct.

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Definitions:

Planning Fallacy

The tendency for plans to be overly optimistic because the planner fails to allow for unexpected problems.

Overly Optimistic

Describes a tendency to hold a rosier outlook than reality might support, often resulting in unrealistic expectations.

Hierarchy Of Goals

A prioritized structure of objectives, ranging from the most immediate and individual to the broad and long-term.

Planning Fallacy

The tendency to underestimate how much time is needed to complete a task, leading to overly optimistic time estimations.