Which of the Following Is NOT a Reason Why Banks

question 32

Multiple Choice

Which of the following is NOT a reason why banks are more willing to lend to some firms than to others?

• A)Banks prefer to lend to firms with more stable cash flows.
• B)Banks prefer to lend to firms with more physical as opposed to intellectual assets.
• C)Banks prefer to lend to firms that remain in a specific geographical region.
• D)All of the above are preferences for banks.

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Definitions:

Indirect Method

A way of reporting net cash flow from operating activities in the statement of cash flows by adjusting net income for changes in working capital items and non-cash transactions.

Statement of Cash Flows

This financial statement provides an overview of a company's cash inflow and outflow over a period, detailing sources and uses of cash from operating, investing, and financing activities.

Operating Activities

Operating activities refer to the day-to-day functions involved in running a business, which are directly related to its primary activities and include generating revenue and paying expenses.

Depreciated Equipment

Equipment whose value has been reduced over time due to wear and tear or obsolescence, reflecting its reduced utility.