Why Are "Cash and Cash Equivalents" Treated as a Single

question 8

Essay

Why are "cash and cash equivalents" treated as a single unit on the cash flow statement?

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Definitions:

Capital Goods

Physical assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.

Investment

In economics, spending for the production and accumulation of capital and additions to inventories.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up over time.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at set prices.