Which of the Following Statements Concerning a Firm's Cash Flows

question 36

Multiple Choice

Which of the following statements concerning a firm's cash flows and profits is false?

• A) Managers must be at least as concerned with cash flows as with profits.
• B) A company that sells merchandise at a profit will generate cash soon enough to replenish cash flows required for continued production.
• C) The cash flows generated in a given time period can differ from the profits reported.
• D) Profits are no 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:

One Child Policy

A former birth control policy of China aimed at controlling the population by limiting families to only one child with few exceptions.

Human Resource Problems

Issues related to the management of employees within an organization, including recruitment, employment, and retention.

Developing Nations

Countries with lower levels of industrialization, lower standards of living, and lower Human Development Index (HDI) ratings compared to more industrialized nations.