Which of the Following Statements Concerning a Firm's Cash Flows

Multiple Choice

Which of the following statements concerning a firm's cash flows and profits is false?

A) Managers must be at least as concerned with cash flows as with profits.
B) A company that sells merchandise at a profit will generate cash soon enough to replenish cash flows required for continued production.
C) The cash flows generated in a given time period can differ from the profits reported.
D) Profits are no assurance that cash flow will be sufficient to maintain solvency.
E) Due to required cash investments in current assets,fast-growing and profitable companies can literally "grow broke".