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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