Asked by
Ankit Shandilya
on Dec 09, 2024
Verified
Cash flow to creditors must increase when:
A) A firm increases its long-term debt by more than its interest expense in any given year.
B) The cash flow to stockholders is constant and the cash flow from assets increases.
C) The operating cash flow increases and the cash flow to stockholders decreases.
D) The interest rate on the firm's debt decreases.
E) A firm borrows more than it repays in any one given year.
Cash Flow
The net amount of cash being transferred into and out of a business, critical for assessing its liquidity, operational efficiency, and financial health.
Creditors
Individuals or institutions to whom money is owed by a debtor.
Interest Expense
The price paid by an entity for the use of borrowed funds throughout a specific time frame.
- Identify the variables that influence the movement of cash within a company.
Verified Answer
JM
Learning Objectives
- Identify the variables that influence the movement of cash within a company.