Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements—Decrease in Accounts Payable—indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:
a. Add to net income to arrive at net cash flows from operating activities
b. Subtract from net income to arrive at net cash flows from operating activities
c. Not used to adjust net income to calculate net cash flows from operating activities
B
You might also like to view...
Horizontal analysis is performed when:
a. total assets are set at 100% and all other balances are a percentage of total assets. b. the percentage change in the balance sheet and income statement numbers is computed for one period to the next. c. there is a need to calculate and compare key ratios from period to period. d. income statement amounts are shown as a percentage of total sales.
The Internet is a more appropriate direct marketing medium for life cycle marketing than direct-response advertising is
Indicate whether the statement is true or false
Computation of the annual percentage rate (APR) recognizes interest compounding, whereas computation of the effective annual rate (EAR) does not.
Answer the following statement true (T) or false (F)
A manufacturer builds finished items A, B, and C from five different components. They currently have several finished units, a number of items that are partially complete, and many components that have just been delivered from their suppliers
The finished items, incomplete items and raw components can all be assigned some monetary value even though the manufacturer typically does not sell anything except finished items. The manufacturer needs to raise capital quickly so they formulate a linear program to help them decide on the most profitable way ahead. Their linear programming expert forgets to restrict their decision variables to non-negative values and is surprised when the computer output tells them that finished item A and C should be negative. If the company always follows the advice of their linear programming analysis, what should they do and why?