If a firm has a negative cash flow from assets every year for several years, the firm:
A)may be continually increasing in size.
B)must also have a negative cash flow from operations each year.
C)is operating at a high level of efficiency.
D)is repaying debt every year.
E)has annual net losses.

Question

Quizplus · Accepted Answer

A firm with negative cash flow from assets could be investing heavily in growth and expansion, leading to an increase in size despite the negative cash flow.

If a Firm Has a Negative Cash Flow from Assets