Which One of the Following Actions Represents a Source of Cash

question 42

Multiple Choice

Which one of the following actions represents a source of cash?

• A) Granting credit to a customer
• B) Purchasing new machinery
• C) Making a payment on a bank loan
• D) Purchasing inventory
• E) Accepting credit from a supplier

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Definitions:

Risk-free Rate

An anticipated earning on an investment that is free from the danger of monetary loss, commonly illustrated by the return rate on state-issued securities.

Market-capitalization Rate

The combined value of all a company's shares currently on the market, found by taking the current price of one stock and multiplying it by the total number of shares available.

Expected Return

The anticipated average return of an investment over a specified period, based on historical data or statistical analysis.

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, indicating the liquidity available for expansion or dividend distribution.