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

---

Definitions:

Cash Equivalent

Short-term, highly liquid investment assets that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

Money Market

A segment of the financial market where short-term funds are borrowed and lent, typically involving instruments with high liquidity and short maturities.

Treasury Bill

A short-term government security issued at a discount from the face value and paying no interest, maturing usually in one year or less.

Fraud Triangle

A model that describes the three elements present when an individual commits fraud: opportunity, pressure, and rationalization.