An Increase in Accounts Receivables and an Increase in Inventory

question 35

True/False

An increase in accounts receivables and an increase in inventory will need to be subtracted from operating profit in the calculation of net cash flows from operating activities.

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Definitions:

Federally-Sponsored Agency Debt

Securities issued by government-sponsored enterprises to finance activities benefiting the public, with varying degrees of government backing.

Yield Spread

The difference between the yields on varying debt instruments, usually of different credit qualities or maturing at different times.

U.S. Treasuries

Short for United States Treasury securities, which are government debt instruments issued by the U.S. Department of the Treasury to finance government spending.

Brokers' Calls

Short-term loans for brokers to fund their clients' margin accounts, often callable on demand.