All of the Following Are Advantages of an Increasing Cash

question 24

Multiple Choice

All of the following are advantages of an increasing cash flow from operations except:

• A) A company is likely to pay its current bills with cash from operations not earnings.
• B) A company with cash is in a better position to fund growth.
• C) Large cash flows eliminate the need for borrowing.
• D) Earnings are viewed better if cash flows from operations closely match profit for the year.

---

Definitions:

Direct Labor-Hours

The number of labor hours spent by employees directly working on a product or service.

Machine-Hours

A measure of the amount of time a machine is operated, used for costing purposes, production scheduling, and capacity planning in manufacturing.

Forming Department

A division or section within a manufacturing plant where a specific, dedicated portion of the production process occurs, focusing on shaping or forming materials into parts or products.

Assembly Department

A sector within a manufacturing facility where individual components are assembled into final products.