The cash flow that results from a company's ongoing, normal business activities is called:

Multiple Choice

• operating cash flow.

• capital spending.

• net working capital.

• cash flow from assets.

• cash flow to creditor.

Miles invested $5,000 ten years ago and expected to have $10,000 today. He has neither added nor withdrawn any money since his initial investment. All interest was reinvested and compounded annually. As it turns out, he only has $8,400 in his account today. Which one of the following statements must be true?

Multiple Choice

• He earned simple interest rather than compound interest.

• He earned a lower interest rate than he expected.

• He did not earn any interest on interest.

• He ignored the Rule of 72, which caused his account to decrease in value.

• The future value interest factor turned out to be higher than he expected.