To Prepare the Statement of Cash Flows Using the Indirect

question 213

Multiple Choice

To prepare the statement of cash flows using the indirect method,interest income is ________.

• A)added to net income
• B)subtracted from net income
• C)already included in net income
• D)included as an item in the financing section

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates that the stock is more volatile than the market.

Dividend

A portion of a company's earnings that is paid to shareholders, typically on a regular basis.

Risk-Free Rate

The expected profit from an investment that carries no chance of financial loss, typically shown by the interest rate on governmental bonds.

Growth Rate

The rate at which a company's earnings, revenue, or other critical metric increases over a specified period.