Financing with Earnings Is an Option Under What Circumstances

question 18

Multiple Choice

Financing with earnings is an option under what circumstances?

• A) A company is profitable and has positive cash flow from operations.
• B) A company is profitable and has negative cash flow from operations.
• C) A company has no debt and is growing.
• D) A company needs debt to survive.
• E) None of the above

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Definitions:

Racketeer Influenced and Corrupt Organizations (RICO) Act

A United States federal law designed to combat organized crime by enabling the prosecution of criminal organizations for the actions of their members.

Wrongful Act

An action that is illegal or immoral, often leading to harm or injury to another and possibly resulting in legal liability.

Actus Reus

Latin for “guilty act”; a wrongful behavior that is associated with the physical act of a declared crime.

Guilty Act

Refers to the actus reus in criminal law, which is the physical act or unlawful omission leading to a crime.