Which of the Following Adjustments Is NOT Correct If You

question 87

Multiple Choice

Which of the following adjustments is NOT correct if you are trying to calculate cash flow from financing activities?

• A)Add dividends paid
• B)Add any increase in long-term borrowing
• C)Add any increase in short-term borrowing
• D)Add proceeds from the sale of stock

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Definitions:

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar, ensuring no single entity can control prices.

Profits

The financial gain achieved when the revenues generated from business activities exceed the expenses, taxes, and costs incurred in operating the business.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, reflecting the financial gain in terms of opportunity costs.