Cash Flows Arising from Investing or Financing Activities May Be

question 13

Multiple Choice

Cash flows arising from investing or financing activities may be reported on a net basis when:

• A) cash receipts and payments for items in which the turnover is slow, the amounts are large, and the maturities are short.
• B) cash receipts and payments for items in which the turnover is quick, the amounts small, and the maturities are short.
• C) cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short.
• D) cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are long-term.

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Definitions:

Marginal Cost

The additional cost incurred from making one more unit of a good or service.

Optimal-output

The level of production that maximizes a firm's profit, where marginal cost equals marginal revenue.

Break-even

The point at which cost or expenses and revenue are equal, resulting in neither profit nor loss.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and firms are making neither excess profits nor losses.