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 30 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
Excellent

bigsis44

  • Member
  • Posts: 317
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

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?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

The average human gut is home to perhaps 500 to 1,000 different species of bacteria.

Bow shock formed by the magnetosphere of LL Orionis (center) as it collides with the Orion Nebula fl Bow shock formed by the magnetosphere of LL Orionis (center) as it collides with the Orion Nebula fl
Benign prostatic hyperplasia. The condition results when an inner capsule of nonfunctional prostate Benign prostatic hyperplasia. The condition results when an inner capsule of nonfunctional prostate
Angioplasty. One form is called balloon angioplasty, shown here. A balloon catheter is threaded into Angioplasty. One form is called balloon angioplasty, shown here. A balloon catheter is threaded into
Blood Flow Through the Cardiorespiratory System Blood Flow Through the Cardiorespiratory System
Blood Flow Through Capillaries Blood Flow Through Capillaries
The flow of genetic information The flow of genetic information
Video: Summary of female reproductive cycle days 1-28

For a complete list of videos, visit our video library