Negative Operating Cash Flow May Indicate All of the Following

question 196

Multiple Choice

Negative operating cash flow may indicate all of the following except:

• A)the company may not be able to replace property,plant and equipment.
• B)stockholders may not receive a dividend.
• C)the company may be in the introductory phase of its life cycle.
• D)the company did not earn a profit from its core business activity.

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Definitions:

Coupon Bond

A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until the maturity date, when the principal amount is repaid.

Maturity

The expiration date of a financial instrument, at which point the principal (and all remaining interest) is due to be paid.

Coupon Rate

The annual interest rate paid by bond issuers on the bond's face value.

Duration

A financial metric that indicates the sensitivity of a bond's price to changes in interest rates, commonly measured in years.