Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow. Introduction: Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

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Answer 1

Question

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

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Answer 2

Question

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

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Answer 3

Question

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

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Answer 4

Question

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

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Answer 5

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

Answer 6

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

Answer 7

Chapter 4.2, Problem 4.5RQ

Summary Introduction

To discuss: Reason for classifying increase and decrease in cash as use of cash flow and source of cash flow.

Introduction:

Cash flow is the inflow and outflow of cash and capital in a business where, a positive cash flow implies rise in the liquid assets, return on capital to the shareholders and more whereas a negative cash flow includes decreasing in the firm’s liquid assets.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 4.1 - Prob. 4.1RQ Ch. 4.1 - Prob. 4.2RQ Ch. 4.2 - Briefly describe the first four modified...Ch. 4.2 - Describe the overall cash flow through the firm in...Ch. 4.2 - Prob. 4.5RQ Ch. 4.2 - 4-B Why is depreciation (as well as amortization...Ch. 4.2 - Prob. 4.7RQ Ch. 4.2 - Prob. 4.8RQ Ch. 4.2 - Prob. 4.9RQ Ch. 4.3 - Prob. 4.10RQ

Solution Summary: The author explains that decrease in cash balance is the cash inflow or source of cash flow as cash must have been released for some purpose (such as increase in inventory).

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