The Statement of Cash Flows

question 63

Multiple Choice

The Statement of Cash Flows:

• A)Lists all cash flows over the life of a company.
• B)Breaks down all cash transactions into investing and financing cash flows.
• C)Shows that the change in total cash from one year to the next is equal to the net operating,investing,and financing cash flows.

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Definitions:

Economy of Scale

Economy of Scale refers to the cost advantage that arises with increased output of a product, as fixed costs are spread out over more units of production.

Cash Flow

The complete sum of funds flowing in and out of a company, notably influencing its ability to cover immediate expenses.

Merger

A business strategy where two or more companies agree to join together to form a new entity, often to expand market share or reduce competition.

Marketing Gains

Increases in market share or product value resulting from marketing strategies and campaigns.