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

Author Question: Why is an understanding of cash flow so important in the study of finance? What will be an ideal ... (Read 103 times)

drink

  • Hero Member
  • *****
  • Posts: 554
on: Jul 10, 2018
Why is an understanding of cash flow so important in the study of finance?
 
  What will be an ideal response?

Question 2

Which of the following identities is FALSE?
 
  A) Cash Flow to Creditors = Interest Expense - Net New Borrowing from Creditors
  B) Net New Borrowing = Ending Long-term Liabilities - Beginning Long-Term Liabilities
  C) Cash Flow to Owners = Dividends + Net New Borrowing from Owners
  D) Net New Borrowing from Owners = Change in Equity


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

trog

  • Sr. Member
  • ****
  • Posts: 343
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: A firm may show robust accounting profits, yet still get into serious financial trouble or even go bankrupt. It is only cash flow that allows accurate and insightful financial analysis, which is the foundation of a firm's long-run planning and value maximization.

Answer to Question 2

Answer: C
Explanation: C) Cash Flow to Owners = Dividends - Net New Borrowing from Owners


drink

  • Member
  • Posts: 554
Reply 2 on: Jul 10, 2018
Gracias!

Bigfoot1984

  • Member
  • Posts: 321
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Cucumber slices relieve headaches by tightening blood vessels, reducing blood flow to the area, and relieving pressure.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

The modern decimal position system was the invention of the Hindus (around 800 AD), involving the placing of numerals to indicate their value (units, tens, hundreds, and so on).

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

How noncyclic electron flow during the light reactions generates ATP and NADPH. How noncyclic electron flow during the light reactions generates ATP and NADPH.
Respiratory Assistive Devices, Patient Using a Peak Flow Meter Respiratory Assistive Devices, Patient Using a Peak Flow Meter
Continuous positive airway pressure (CPAP) device. The sleeping subject is receiving the benefits of Continuous positive airway pressure (CPAP) device. The sleeping subject is receiving the benefits of
Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ... Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ...
The upper waters of the oceans flow horizontally in currents The upper waters of the oceans flow horizontally in currents
Dad is important to me Dad is important to me
Video: Introduction to Tuberculosis

For a complete list of videos, visit our video library