Which of the Following Is Likely to Increase the Firm's

question 1

Multiple Choice

Which of the following is likely to increase the firm's additional funds needed?

• A)The firm cuts its dividend by 50 percent.
• B)The firm reduces its usage of trade credit.
• C)The firm has unused fixed assets.
• D)All of these would increase the firm's additional funds needed.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Cash Receipts

The total amount of cash received by a business during a specified period.

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business, used to evaluate its financial health.

Operating Activities

Activities that are part of a company's primary business operations, such as selling goods and services.