A Firm's Internally Generated Funds Are Calculated By

question 28

Multiple Choice

A firm's internally generated funds are calculated by:

• A) subtracting depreciation from net income.
• B) adding depreciation to net income.
• C) adding dividends to net income.
• D) subtracting dividends from net income plus depreciation.

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Definitions:

Present Value

The immediate value of an upcoming amount of money or a series of cash inflows, based on a set rate of return.

Usury Law

Legislation that sets maximum interest rates that can be charged on loans to prevent exploitation and excessive interest charges.

Shortage

A market condition where the demand for a product exceeds its supply, often leading to higher prices.

Loanable Funds

The total funds available within an economy for borrowing, including savings and other investments.