This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain the difference between profitability and cash flow. What will be an ideal ... (Read 56 times)

serike

  • Hero Member
  • *****
  • Posts: 542
on: Jun 30, 2018
Explain the difference between profitability and cash flow.
 
  What will be an ideal response?

Question 2

Under which of the following assumptions would the nominal interest rate be equal to the real interest rate?
 
  A) Expected inflation is equal to the nominal interest rate.
  B) Expected inflation is equal to the real interest rate.
  C) Expected inflation is negative.
  D) Expected inflation is equal to zero.
  E) none of the above


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

succesfull

  • Sr. Member
  • ****
  • Posts: 339
Reply #1 on: Jun 30, 2018
Answer to Question 1

Some firms are borrowing constrained. Their only source of funds to buy investment is current profit. So, when current profit rises, those borrowing constrained firms increase investment. This summarizes how cash flow can affect a firm's investment decision. Profitability simply refers to how changes in the expected present value of future profits affect investment.

Answer to Question 2

D


serike

  • Member
  • Posts: 542
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

xthemafja

  • Member
  • Posts: 348
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

More than 34,000 trademarked medication names and more than 10,000 generic medication names are in use in the United States.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Blood flow before TIPS Blood flow before TIPS
The lymphatic system. Lymphatic vessels, major lymph nodes, and lymphatic organs. The direction of l The lymphatic system. Lymphatic vessels, major lymph nodes, and lymphatic organs. The direction of l
Brachial Plexus drawing plus the difference in the forearm Brachial Plexus drawing plus the difference in the forearm
Biological Information Flow Biological Information Flow
Industrial solid waste process flow diagram Industrial solid waste process flow diagram
Simplified diagram of information flow (the central dogma) from DNA to RNA Simplified diagram of information flow (the central dogma) from DNA to RNA
Video: Contraction cycle of a sarcomere

For a complete list of videos, visit our video library