The Effect of a Pro-Rata Share Issue for Cash by a Subsidiary

question 5

Multiple Choice

The effect of a pro-rata share issue for cash by a subsidiary on the consolidated cash flow statement:

• A)is always totally eliminated
• B)is always included
• C)is only included to the extent the shares are taken up by shareholders who are not members of the group (they are non-controlling interest shareholders)
• D)is only included to the extent the shares are taken up by the parent

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Definitions:

Total Product

The total quantity of output or goods produced by a firm or company using a given quantity of inputs during a specific time period.

Marginal Product

The additional output generated by adding one more unit of a specific input, all other inputs being held constant.

Total Product

The total quantity of output produced by a firm using a given amount of inputs.

Law Of Diminishing Returns

An economic principle stating that adding an additional factor of production results in smaller increases in output.