Payments to creditors that include interest and the repayment of principal are referred to as:
A)the cash flow to stockholders.
B)the reduction in net working capital.
C)debt service.
D)operating cash flow.
E)the change in net working capital.

Question

Quizplus · Accepted Answer

Debt service refers to the payments made to creditors that include both interest and the repayment of principal amount borrowed. Options A, D, and E refer to different components of cash flow, while option B refers to a reduction in net working capital. Therefore, option C - debt service - is the most appropriate choice.

Payments to Creditors That Include Interest and the Repayment of Principal