Which of the Following Factors Could Explain Why Regal Industrial

question 59

Multiple Choice

Which of the following factors could explain why Regal Industrial Fixtures had a negative net cash flow last year, even though the cash on its balance sheet increased?

• A) the company repurchased 20% of its common stock.
• B) the company sold a new issue of bonds.
• C) the company made a large investment in new plant and equipment.
• D) the company paid a large dividend.
• E) the company had high amortization expenses.

---

Definitions:

Slippery Slope Fallacy

A logical fallacy that occurs when an argument falsely assumes that one action will lead to a series of other actions resulting in a negative outcome, without providing evidence for such a causal chain.

Fallacy Of Composition

The erroneous reasoning that what is true of the parts must also be true of the whole.

Fallacy Of Division

A logical fallacy that occurs when one assumes that something true of a whole must also be true of its parts.

Hasty Generalization

A logical fallacy where a conclusion is drawn from insufficient evidence or sample size.