When a Company Uses the Direct Method to Present the Statement

question 101

True/False

When a company uses the direct method to present the statement of cash flows,cash received from the sale of a long-term asset increases the amount of net cash provided by investing activities.

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Definitions:

Total Variable Cost Curve

A graph that shows the relationship between total variable cost and the level of a firm’s output.

Factor Prices

The prices of the inputs used in the production process, such as labor, capital, and land.

Output

The total amount of goods and services produced by a business, industry, or economy.

Total Variable Costs

The sum of expenses that vary with production volume, including costs for raw materials, labor, and utilities directly involved in the production process.