The statement of cash flows is used by outside parties in all but which of the following ways?
A. To assess equity values since the firm's value is dependent on the discounted present value of its expected future cash flows.
B. To assess whether to underwrite an issue of debt or equity securities, using the firm's expected operating cash flows in the analysis.
C. To assess if the proper amount of income taxes is reported and can be paid from current funds.
D. To assess credit risk, as cash flows provide the resources for periodic interest and principal repayment.
Answer: C
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