The Primary Source of the Firm's Cash Flow Is Usually

question 10

Multiple Choice

The primary source of the firm's cash flow is usually:

• A) net income.
• B) tax credits.
• C) earnings before interest and depreciation minus taxes.
• D) capital spending after taxes.
• E) working capital requirements.

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Definitions:

Parent Company

A corporation that owns a majority of the shares of another company, thus controlling management and operations.

Controlled Company

A company in which a majority of its stock is owned or its operations are controlled by another entity.

Investee Company

A company in which another company (the investor) holds a significant stake but does not have controlling interest.

Parent Company

An entity that owns enough voting stock in another corporation to control its management and operations.