A method whereby a loan officer focuses on why a borrower's cash flows may change over time is known as:
A)indirect cash flow.
B)direct cash flow.
C)pervasive cash flow.
D)variable cash flow.
E)total cash flow.

Question

Quizplus · Accepted Answer

This method is known as direct cash flow since it focuses on the direct factors that may affect a borrower's cash flows in the future, such as changes in income, expenses, and debt payments. Indirect cash flow refers to the method of calculating cash flows by starting with net income and adjusting it for non-cash items, while pervasive cash flow and variable cash flow are not commonly used terms in this context. Total cash flow refers to the sum of all cash inflows and outflows for a given period.

A Method Whereby a Loan Officer Focuses on Why a Borrower's