Is It Possible for a Firm to Have Positive Net

question 107

Multiple Choice

Is it possible for a firm to have positive net income and yet have cash flow problems?

• A)No, this is impossible since net income increases the firm's cash.
• B)Yes, this can occur when a firm is growing very rapidly.
• C)Yes, this is possible if the firm window-dressed its financial statements.
• D)No, this is impossible since net income and cash are highly correlated.

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