Option Contracts Are Used to Reserve a Parcel of Land

question 7

True/False

Option contracts are used to reserve a parcel of land so that it will not be sold to someone else,while the developer does preliminary analysis of the site.

---

Definitions:

Operating Activities Section

A part of the cash flow statement that shows the cash inflows and outflows resulting from the company's primary business activities.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and signifies a claim on part of the corporation's assets and earnings.

Operating Activities

The day-to-day activities of a company involved in producing and selling its products or providing services, which generate most of the company's cashflows.

Indirect Method

A technique used in cash flow statements to adjust net income for non-cash transactions, depreciation, and changes in working capital.