Both the Direct Method and Indirect Method Will Arrive at the Same

question 82

True/False

Both the direct method and indirect method will arrive at the same amount for cash flow from operating activities.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, commonly used in finance to assess the volatility of an investment.

Single-index Model

A model of stock returns that decomposes influences on returns into a systematic factor, as measured by the return on a broad market index, and firm-specific factors.

Systematic Component

The part of an investment’s return or risk that is attributable to broad market factors affecting all investments to some degree.