What Is the Proper Measure of Cash flOw to Creditors

question 247

Multiple Choice

What is the proper measure of cash flow to creditors in a given year?

• A) Interest paid.
• B) Operating cash flow minus net new borrowing.
• C) Interest paid plus changes in long-term debt.
• D) Interest paid plus net new borrowing minus additions to net fixed assets.
• E) Interest paid minus net new borrowing.

Identify and understand tasks associated with the Vendors section in QuickBooks and their purposes.

Understand the process for recording services and inventory purchases in QuickBooks, including the appropriate windows and transaction types.

Comprehend how QuickBooks tracks financial transactions, including the effects of entering and paying bills on accounts.

Recognize the purpose and use of various vendor-related reports and documents in QuickBooks, including aging reports and Form 1099.

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Definitions:

Annual Rate of Return Technique

A method to estimate the profitability of potential investments by calculating the projected annual rate of return.

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Cash Payback

A method of evaluating an investment by determining the amount of time it will take to recoup the initial investment from its cash flows.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the organization's goal of wealth maximization.