The first month of operation showed the net cash from operating activities to be $1,850, the net cash from investing activities to be ($3,000), and the ending cash balance to be $1,600.The net cash from financing activities must be:
A) $450.
B) $2,750.
C) $3,250.
D) $6,450.

Question

Quizplus · Accepted Answer

The net cash flow equation is:
Net Cash Flow = Net Cash from Operating Activities + Net Cash from Investing Activities + Net Cash from Financing Activities

Given:
Net Cash from Operating Activities = $1,850
Net Cash from Investing Activities = ($3,000)
Ending Cash Balance = $1,600

Using the net cash flow equation, we can calculate the net cash from financing activities:
Net Cash Flow = $1,850 + ($3,000) + Net Cash from Financing Activities
$1,600 = $1,850 - $3,000 + Net Cash from Financing Activities
$5,550 = Net Cash from Financing Activities

Therefore, the net cash from financing activities is $5,550, but since it asks for the net cash flow only, we need to subtract the amount from the question given ($1,600).
Net Cash from Financing Activities = $5,550 - $1,600 = $3,950

Therefore, the answer is B) $2,750.

The First Month of Operation Showed the Net Cash from Operating