Learning Objectives

Question 1

What is cash flow used for in decision making?

Answer 1

Cash flow is used as a measure of profitability and a factor in decision making.

Question 2

How does cash flow relate to net operating income (NOI)?

Answer 2

Cash flow has a relation to net operating income (NOI).

Question 3

What information is contained in a cash budget?

Answer 3

A cash budget contains information on cash inflows and outflows.

Question 4

What distinguishes a cash budget from other types of budgets?

Answer 4

The cash budget is distinct from the operating budget and long-range budget.

Question 5

What are practical ways to monitor cash inflows and outlays?

Answer 5

Implementing practical monitoring methods for cash inflows and outlays.

Question 6

What trends should be analyzed in relation to cash?

Answer 6

Trends in cash, income, and expenses should be analyzed.

Question 7

What is the internal rate of return (IRR) related to?

Answer 7

The internal rate of return (IRR) is related to cash flow.

Question 8

How are cash flow and IRR used in decision making?

Answer 8

Both cash flow and IRR are used in decision making about the viability of projects.

Question 9

What is cash-on-cash return?

Answer 9

Cash-on-cash return is a calculation used in decision making.

Question 10

What is the purpose of calculating cash-on-cash return?

Answer 10

To use the result in decision making.