Cash flOw from Assets Is Equal To

question 140

Multiple Choice

Cash flow from assets is equal to:

• A) Operating cash flow minus net new equity plus net new borrowing.
• B) Cash flow to creditors minus cash flow to stockholders.
• C) Operating cash flow minus the change in net working capital minus net capital spending.
• D) Operating cash flow plus net capital spending minus the change in net working capital.
• E) Operating cash flow minus depreciation plus taxes.

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Definitions:

Direct Material

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the product's cost.

Indirect Material

Items used in the production process that do not become an integral part of the final product and are not easily traced to specific products, such as lubricants and cleaning supplies.

Unadjusted Cost of Goods Sold

The total cost directly associated with producing goods, not including any adjustments for inventory changes or operational costs.

Finished Goods Inventory

Finished products on hand that are prepared for sale, yet remain unpurchased by buyers.