A Firm Has Net Sales of $25,000,costs of Goods Sold

question 54

Multiple Choice

A firm has net sales of $25,000,costs of goods sold of $10,000,selling,general and administrative expenses of $8,000 (of which $2,000 are depreciation expenses) ,and taxes (in cash) of $3,000.What is this firm's operating cash flow (using the traditional or direct method) ?

• A)$4,000
• B)$15,000
• C)$6,000
• D)$8,000
• E)None of the options is correct.

---

Definitions:

Purchasing Power

The worth of a currency represented by how much goods or services can be purchased with one unit of that currency.

Recognition Lag

The time delay between when an economic problem or shock occurs and when it is recognized or identified by policymakers.

Political Lag

The delay between a need for policy action being identified and the government implementing the response, often due to bureaucratic or political reasons.

Decision Lag

The time taken between identifying an economic issue and the implementation of policy to address it.