Question

Investors and creditors are interested in the probability that their original investment or loan will eventually be returned, and that they will receive a reasonable return while their funds are invested or borrowed. These expectations are collectively referred to as:A. Expected profitability.
B. The objectives of financial reporting.
C. Cash flow prospects.
D. Financial position.

Answer 1

Answer:

Option C Cash Flow Prospects.

Explanation:

The cash flow prospect shows that lending the firm money will increase its performance or not and also that the company is generating enough cash flows that it will be paying returns and principle amount on time. If the cash flwo prospect shows that the company will not be delivering value because it is already struggling with its cash flows issues. Then the money lender will not be interested in paying the company because the company might not pay back the returns and the principle amount.