The Information in a Cash Flow Statement Will Help Users

question 53

Multiple Choice

The information in a cash flow statement will help users assess all of the following EXCEPT

• A) the company's ability to generate future cash flows.
• B) the company's ability to pay dividends and meet obligations.
• C) the company's ability to turn over its accounts receivable.
• D) the reasons for the difference between profit and cash provided or used by operating activities.

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Definitions:

EPS Growth Rate

The rate at which a company's earnings per share (EPS) has grown or is projected to grow over a specified time period.

Rate of Return

It measures the gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost.

NPVGO

Net Present Value of Growth Opportunities; an assessment method to evaluate the value of investing in new projects or equipment considering the present value of expected growth opportunities.

Investor's Return

The profit or loss made on an investment, expressed as a percentage of the initial investment amount.