Financing with Earnings Is an Option Under What Circumstances

question 36

Multiple Choice

Financing with earnings is an option under what circumstances?

• A) A company has no debt and is growing.
• B) A company is profitable and has positive cash flow from operations.
• C) A company is profitable and has negative cash flow from operations.
• D) A company has substantial cash savings and marketable securities.

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Definitions:

Foreclosed

A legal process where a borrower's right to a property is terminated, usually due to failure to meet the repayment terms of a loan secured by that property.

Empty Nest Syndrome

Feelings of sadness or emotional distress affecting parents after their children have grown up and left home.