In the Simple Circular-Flow Diagram,households

question 35

Multiple Choice

In the simple circular-flow diagram,households

• A)are the only decision makers.
• B)own the factors of production.
• C)are buyers of inputs.
• D)consume only some of the goods and services that firms produce.

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Definitions:

Operating Cash Flow

An indicator of the money produced through the regular business activities of a company.

Noncash Deductions

Expenses that reduce taxable income but do not involve an actual cash outlay, such as depreciation.

Net Working Capital

The disparity between a firm's existing assets and its immediate debts.

NPV Computation

The process of calculating the Net Present Value of an investment, which assesses the profitability by comparing the present value of cash inflows to the initial investment.