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3. Which of the following is not a “principle” of financial accounting?
A. Historical cost
B. Revenue recognition
C. Continuity
D. Matching
E. Full disclosure 4. Accounts receivable (net) increased by $500,000 during the year. This increase has what effect on cash flow?
A. Reduces it
B. Increases it
C. No effect

5. In 20X4, Olentangy Health Care (OHC)’s cost of capital was 6%. Its investments on a historical cost valuation basis are $80,000, on a replacement cost basis are $100,000, and on a current market value basis are $110,000. If you were on OHC’s board, what minimum level of annual cash flow would you require in order to continue operations and proceed with planned significant new investments?
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Assume now that the average cost per case drops only to $95. What is the new required

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