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1. Which of the following statements concerning the cash
flow production cycle is true?
a) The profits reported in a given time period equal the cash
flows generated.
b) A company’s operations and finances are independent of
each other.
c) Financial statements have nothing to do with reality
d) The movement of cash to inventory, to accounts
receivable, and back to cash is know as the firm’s working
capital cycle
e) A profitable company will always have sufficient cash to
meet its obligations

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