If a Company Reports a Large Amount of Net Income

question 16

Multiple Choice

If a company reports a large amount of net income on its income statement during a year, the firm will have:

• A)positive cash flow.
• B)negative cash flow.
• C)zero cash flow.
• D)Any of these scenarios are possible.

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Definitions:

Diminishing Marginal Utility

The principle that as more of a good or service is consumed, the additional satisfaction or utility gained from consuming an additional unit decreases.

Sodas

Carbonated beverages, often sweetened and flavored, forming part of the non-alcoholic drinks market.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Marginal Utility

The additional satisfaction or utility gained from consuming one more unit of a good or service.