Which of the Following Is True of the Impact of Cash

question 59

Multiple Choice

Which of the following is true of the impact of cash flows on net working capital?

• A) The higher the cash inflows lower is the net working capital.
• B) The lower the cash outflows lower is the net working capital.
• C) The more predictable the cash inflows of a firm, the more current assets a firm needs.
• D) The more predictable the cash inflows of a firm, the easier is the working capital management.

Understand the concept of flexible and static budgets.

Identify the appropriate activity measure for overhead allocation.

Calculate total overhead costs at different levels of activity.

Determine predetermined fixed overhead rates.

---

Definitions:

Marginal Benefit

The increased pleasure or advantage received from the consumption or creation of an additional unit of a good or service.

Marginal Benefit

The supplementary enjoyment or value derived by a person upon consuming an extra unit of a particular good or service.

Marginal Cost

The cost of producing one additional unit of a good or service.

Marginal Benefit

Marginal benefit is the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.