Which One of the Following Is the Most Common Definition

question 105

Multiple Choice

Which one of the following is the most common definition of cash flow as used in the price-cash flow ratio?

• A)net income minus dividends
• B)net income plus depreciation
• C)net income minus depreciation plus taxes
• D)earnings before interest and taxes plus depreciation
• E)earnings before interest and taxes

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Definitions:

Labor Price Variance

The difference between the actual cost of labor and the budgeted or standard cost, often analyzed in cost accounting.

Standard Rate

A predetermined cost or price that is established for accounting or budgeting purposes, often used in costing and financial analysis.

Actual Hours

The real number of hours worked, as opposed to planned or estimated hours.

Overhead Controllable Variance

The difference between the actual overhead incurred and the overhead that should have been incurred, based on controllable factors.