Using the Indirect Method to Calculate Net Cash Provided by Operating

question 36

Multiple Choice

Using the indirect method to calculate net cash provided by operating activities,a decrease in prepaid expenses is:

• A)subtracted from net income.
• B)added to net income.
• C)ignored since it does not affect expenses.
• D)ignored since it does not affect net income.

---

Definitions:

Newsvendor Model

A mathematical model used in operations management and economics to determine optimal inventory levels for perishable or single-period products, balancing the costs of inventory shortage and overage.

Customer Arrivals

The frequency or rate at which customers enter a system, store, or facility.

Toretto Car Rentals

A fictional or possibly niche business entity specializing in the rental of vehicles, presumably named after a character from a popular movie franchise.

Overbooked Customers

A situation where more customers are accepted than can be served, often used in reference to airlines and hotels.