If Fixed Asset Requirements Increase with Increases in Sales, the Firm

question 35

True/False

If fixed asset requirements increase with increases in sales, the firm will need more sources of finance.​

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Definitions:

Statement of Cash Flows

An account that illustrates the impact of variations in income and balance sheet positions on cash and similar assets.

Indirect Method

A method for presenting cash flow from operations that begins with net income and makes adjustments for transactions that do not involve cash.

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, analyzing a company’s financing, investing, and operating activities.

Operating Activities

Transactions related to the primary business activities, detailed in the cash flow statement.