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One of the benefits of the statement of cash flows is that it helps users evaluate financial flexibility. Which of

the following explanations is a description of financial flexibility?

Financial flexibility refers to the firm's ability to invest in a number of projects with different

objectives and costs.

Financial flexibility refers to the firm's ability to pay its debts as they mature.

Financial flexibility refers to the firm's ability to respond and adapt to financial adversity and

unexpected needs and opportunities.

Financial flexibility refers to how closely the cash position aligns with the asset and liability

accounts.