Which of the Following Statements Is True

question 29

Multiple Choice

Which of the following statements is true?

• A) Rapid growth spurs increases in market share and profits and thus,is always a blessing.
• B) Firms that grow rapidly only very rarely encounter financial problems.
• C) The cash flows generated in a given time period are equal to the profits reported.
• D) Profits provide assurance that cash flow will be sufficient to maintain solvency.
• E) Due to required cash investments in current assets,fast-growing and profitable companies can literally "grow broke".

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Definitions:

GDP Rise

An increase in the Gross Domestic Product, indicating growth in the economy and the production of goods and services.

Velocity

In economic terms, the rate at which money is exchanged from one transaction to another and how much a unit of currency is used in a given period.

Money Supply

Money Supply refers to the total amount of monetary assets available in an economy at any specific time, including cash, coins, and balances held in checking and savings accounts.

M Rises

This term is unclear without context, but could refer to an increase in a specific variable "M" in mathematical, economic, or other models.