In Interpreting a Statement of Cash Flows, Excessive Sales of Property

question 90

True/False

In interpreting a statement of cash flows, excessive sales of property, plant and equipment combined with a lack of cash from financing activities may indicate that the company is selling productive assets to raise cash to cover operating expenses which, in the long run, will limit future growth.

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Definitions:

Stotting Behavior

A jumping behavior seen in various ungulates, where they spring into the air to signal to predators their fitness and difficulty as prey.

Thomson's Gazelle

A swift and graceful antelope found in the savannas of Africa, known for its speed and agility.

Alarm Signal Hypothesis

The theory that certain behaviors or signals are evolved to alert conspecifics to the presence of a predator or danger, enhancing survival.

Confusion Effect Hypothesis

A theory suggesting that predators have difficulty singling out individual prey in large, closely packed groups, thereby reducing predation risk for each group member.