Jessie's Bobcat Rentals' Operations Provided a Negative Net Cash Flow

question 69

Multiple Choice

Jessie's Bobcat Rentals' operations provided a negative net cash flow last year, yet the cash shown on its balance sheet increased.Which of the following statements could explain the increase in cash, assuming the company's financial statements were prepared under generally accepted accounting principles?

• A) The company had high depreciation expenses.
• B) The company repurchased some of its common stock.
• C) The company dramatically increased its capital expenditures.
• D) The company retired a large amount of its long-term debt.
• E) The company sold some of its fixed assets.

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Definitions:

Portfolio Beta

Portfolio Beta is a measure of the overall systematic risk of a portfolio of investments relative to the market as a whole.

Exchange-Traded Fund

An Exchange-Traded Fund (ETF) is a type of investment fund and exchange-traded product, the shares of which are traded on stock exchanges.

Market Beta

A measure of a stock's volatility in relation to the market; a beta greater than 1 indicates higher volatility than the market.

Market Portfolio

A theoretical bundle of investments that includes every type of asset available in the market, with each asset weighted according to its market capitalization.