Which One of the Following Statements Related to a Cash

question 3

Multiple Choice

Which one of the following statements related to a cash budget is correct?

• A)The cumulative surplus is computed prior to adjusting for the minimum cash balance.
• B)Financially healthy firms can have a negative quarterly net cash inflow.
• C)Firms generally set the minimum cash balance at zero for planning purposes.
• D)Capital expenditures are treated as a cash inflow on a cash budget.
• E)A positive net cash inflow for a period indicates the cash disbursements exceed the cash collections for the period.

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Definitions:

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product or service, regardless of the market segment.

Profit-Maximizing

The process or strategy of adjusting production and pricing to achieve the highest possible profit.

Socially Optimal Price

The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product.

Marginal Cost

The expenses associated with creating an extra unit of a good or service.