A Firm Wants to Receive Cash Earnings

question 47

Multiple Choice

A firm wants to receive cash earnings. Management's viewpoint is that cash earnings are ____.

• A) stock dividends
• B) high quality earnings
• C) retained earnings
• D) debt retirement

---

Definitions:

Sales Revenues

The total amount of money generated from sales of goods or services by a company before any expenses are subtracted.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and generate profit.

Direct Cost

A direct cost is an expense that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Manufacturing

The process of converting raw materials or components into finished goods through the use of labor, machinery, tools, and chemical processing.