Deck 5: Cash Flow, Profitability, and the Cash Flow Statement

Question 1

Norquay Inc.manufactures computers.The company tries to minimize the amount of inventory it must carry and therefore only purchases required components after a customer order is received.The computers are usually completed within two days of the customer order and then shipped to the customer on the fourth day following the purchase of materials.Supplier's terms dictate that all purchases must be paid for within 30 days.Norquay offers a deferred financing plan to all of its customers that allow them a 60-day period of no payments or interest.Most of the customers pay their entire balance on the 60th day following delivery of the computer.How many days are there between receiving the inventory from suppliers and receiving cash for the company?

A)2 days
B)4 days
C)26 days
D)64 days

Answer 1

D

Question 2

Norquay Inc.manufactures computers.The company tries to minimize the amount of inventory it must carry and therefore only purchases required components after a customer order is received.The computers are usually completed within two days of the customer order and then shipped to the customer on the fourth day following the purchase of materials.Supplier's terms dictate that all purchases must be paid for within 30 days.Norquay offers a deferred financing plan to all of its customers that allow them a 60-day period of no payments or interest.Most of the customers pay their entire balance on the 60th day following delivery of the computer.What is Norquay's payable deferral period?

A)2 days
B)4 days
C)30 days
D)60 days

Answer 2

C

Question 3

On average a company has goods on hand for 120 days before they sell them.They buy their goods on credit with 30-day terms and they sell their goods by offering 20 days to pay.What is their payables deferral period?

A)30 days
B)90 days
C)110 days
D)120 days

Answer 3

A

Question 4

If a company is experiencing cash shortages, which of the following would help to resolve the problem of cash shortages?

A)If they increase the inventory conversion period.
B)If they increase the payables deferral period.
C)If they increase the inventory self-financing period.
D)If they increase the receivables conversion period.

Question 5

What is the primary objective of accrual accounting?

A)To measure the cash flow of an entity.
B)To measure economic performance of an entity.
C)To predict future cash flows of an entity.
D)To predict future economic performance of an entity.

Question 6

On average a company has goods on hand for 120 days before they sell them.They buy their goods on credit with 30-day terms and they sell their goods by offering 20 days to pay.What is their inventory self-financing period?

A)90 days
B)110 days
C)120 days
D)140 days

Question 7

Which of the following best describes the payable deferral period for a company?

A)The time between when goods arrive at the company and when they are sold.
B)The time between when goods arrive at the company and when they are paid to the supplier.
C)The time between when goods are paid for and when they are sold.
D)The time between when good are paid for and when the cash is collected from their sale.

Question 8

On average a company has goods on hand for 120 days before they sell them.They buy their goods on credit with 30-day terms and they sell their goods by offering 20 days to pay.How many days are there between receiving the inventory from suppliers and receiving cash from customers?

A)90 days
B)110 days
C)120 days
D)140 days

Question 9

Norquay Inc.manufactures computers.The company tries to minimize the amount of inventory it must carry and therefore only purchases required components after a customer order is received.The computers are usually completed within two days of the customer order and then shipped to the customer on the fourth day following the purchase of materials.Supplier's terms dictate that all purchases must be paid for within 30 days.Norquay offers a deferred financing plan to all of its customers that allow them a 60-day period of no payments or interest.Most of the customers pay their entire balance on the 60th day following delivery of the computer.What is Norquay's inventory self-financing period?

A)2 days
B)4 days
C)30 days
D)34 days

Question 10

On average a company has goods on hand for 120 days before they sell them.They buy their goods on credit with 30-day terms and they sell their goods by offering 20 days to pay.What is their receivables conversion period?

A)20 days
B)30 days
C)90 days
D)140 days

Question 11

Norquay Inc.manufactures computers.The company tries to minimize the amount of inventory it must carry and therefore only purchases required components after a customer order is received.The computers are usually completed within two days of the customer order and then shipped to the customer on the fourth day following the purchase of materials.Supplier's terms dictate that all purchases must be paid for within 30 days.Norquay offers a deferred financing plan to all of its customers that allow them a 60-day period of no payments or interest.Most of the customers pay their entire balance on the 60th day following delivery of the computer.What is Norquay's inventory conversion period?

A)2 days
B)4 days
C)30 days
D)60 days

Question 12

What information does cash accounting provide about an entity?

A)It measures economic performance.
B)It measures management performance.
C)It is useful in assessing liquidity.
D)It is useful in assessing profitability.

Question 13

On average a company has goods on hand for 120 days before they sell them.They buy their goods on credit with 30-day terms and they sell their goods by offering 20 days to pay.What is their inventory conversion period?

A)90 days
B)110 days
C)120 days
D)140 days

Question 14

Which of the following would cause net income to be lower than cash flow from operations?

A)Store staff worked the last week of the year until December 31, but will not be paid until January 15.
B)The company bought and paid for a two-year insurance policy.
C)The company made sales to customers on credit that will be paid for in the next fiscal period.
D)On December 31st, the company purchased new display shelves for the store.

Question 15

Which of the following best describes the inventory self-financing period for a company?

A)The time between when goods arrive at the company and when they are sold.
B)The time between when goods arrive at the company and when the cash is collected from their sale.
C)The time between when goods are paid for and when they are sold.
D)The time between when good are paid for and when the cash is collected from their sale.

Question 16

Which of the following would cause net income to be higher than cash flow from operations?

A)Store staff worked the last week of the year until December 31, but will not be paid until January 15.
B)The company amortizes intangible assets over their useful lives.
C)The company made sales to customers on credit that will be paid in the next fiscal period.
D)The company purchased new display shelves for the store.

Question 17

Which of the following best describes the receivables conversion period for a company?

A)The time between when goods arrive at the company and when they are sold.
B)The time between when goods arrive at the company and when the cash is collected from their sale.
C)The time between when goods are paid for and when they are sold.
D)The time between when good are sold and when the cash is collected from their sale.

Question 18

If a company is experiencing cash shortages, which of the following would help to resolve the problem of cash shortages?

A)If they decrease the inventory conversion period.
B)If they decrease the payables deferral period.
C)If they increase the inventory self-financing period.
D)If they increase the receivables conversion period.

Question 19

Which of the following best describes the inventory conversion period for a company?

A)The time between when goods arrive at the company and when they are sold.
B)The time between when goods arrive at the company and when the cash is collected from their sale.
C)The time between when goods are paid for and when they are sold.
D)The time between when good are paid for and when the cash is collected from their sale.

Question 20

If a company is experiencing cash shortages, which of the following would help to resolve the problem of cash shortages?

A)If they increase the inventory conversion period.
B)If they decrease the payables deferral period.
C)If they increase the inventory self-financing period.
D)If they decrease the receivables conversion period.

Question 21

If a company received interest during the year on its investments, how would it be classified on the cash flow statement?

A)As a cash flow from operations.
B)As a cash flow from investing activities.
C)Both of the above are correct
D)Neither of the above are correct.

Question 22

A furniture company is expanding its operations.Which of the following would be reflected in the cash flow statement but not in the income statement?

A)A build-up of inventory to support increased sales.
B)An increase in sales staff to handle the increased sales.
C)Rent paid for a larger showroom.
D)An increase in the amount of sales for cash.

Question 23

What do you call the cycle by which an entity begins with cash, invests in resources, provides good to customers and then collects the cash from customers?

A)The cash cycle
B)The operating cycle
C)The business cycle
D)The accounting cycle

Question 24

A company is preparing the cash flow from operations (CFO) section of its cash flow statement.Amortization expense for the year was $25,000.Which of the following statements is true?

A)Amortization expense should be added back to net income to calculate CFO if they are using the indirect method.
B)Amortization expense should be deducted from net income to calculate CFO if they are using the indirect method.
C)Amortization expense should be added back to net income to calculate CFO if they are using the direct method.
D)Amortization expense should be deducted from net income to calculate CFO if they are using the direct method.

Question 25

Which of the following would not be included in the definition of "cash" on the cash flow statement?

A)Cash on hand.
B)Cash in foreign bank accounts.
C)Bonds owned by the company.
D)Short-term guaranteed investment certificates owned by the company.

Question 26

If a company paid dividends during the year, how would it be classified on the cash flow statement?

A)As a cash flow from operations.
B)As a cash flow from investing activities.
C)As a cash flow from financing activities.
D)As a cash and cash equivalent.

Question 27

If a company is experiencing cash shortages, which of the following would help to resolve the problem of cash shortages?

A)If they increase the inventory conversion period.
B)If they decrease the payables deferral period.
C)If they decrease the inventory self-financing period.
D)If they increase the receivables conversion period.

Question 28

Which of the following could be classified as a cash flow from operations on the cash flow statement?

A)Interest paid.
B)Dividends paid.
C)Purchase of an intangible asset to be used in operations.
D)Repayment of a bank loan.

Question 29

How should a loss on the sale of land be reflected in the operating activities section of the cash flow statement under the indirect method?

A)As a cash inflow
B)As a cash outflow
C)As an addition to net income
D)As a deduction to net income

Question 30

Under the indirect method why is a gain on the disposal of land subtracted from net income?

A)Because it is not a cash expense.
B)Because it is not a cash revenue.
C)Because it is an investing activity.
D)Because it is a financing activity.

Question 31

A cash flow statement for an entity calculates the cash flow from operations by showing cash collections and cash disbursements related to operations.What method of calculating cash flow from operations are they using?

A)Direct method
B)Indirect method
C)Net income method
D)Cash equivalents method

Question 32

If a company paid interest during the year on amounts it had borrowed, how would it be classified on the cash flow statement?

A)As a cash flows from operations.
B)As a cash flows from financing activities.
C)Both of the above are correct
D)Neither of the above are correct

Question 33

Which of the following would be classified as a cash flow from investing activities on the cash flow statement?

A)Interest paid.
B)Dividends paid.
C)Purchase of an intangible asset to be used in operations.
D)Repayment of an operating loan.

Question 34

Which of the following would be included in the definition of cash and cash equivalents on the cash flow statement?

A)Short term bonds payable maturing at the end of the year.
B)Cash on deposit in a foreign country that has restrictions about removing money from the country.
C)90-day T-Bills.
D)An amount owed by a customer.They had sent a cheque but the bank returned it due to insufficient funds.

Question 35

Which of the following is not a category on the cash flow statement?

A)Cash flows from operations.
B)Cash flows from working capital.
C)Cash flows from investing activities.
D)Cash flows from financing activities.

Question 36

A company sold a piece of land for $40,000 which had an original cost of $55,000.What is the cash flow effect of this transaction?

A)A $55,000 increase in cash flows from operations.
B)A $40,000 increase in cash flows from operations.
C)A $55,000 increase in cash flows from investing activities.
D)A $40,000 increase in cash flows from investing activities.

Question 37

A cash flow statement for an entity calculates the cash flow from operations by starting with net income and then makes a series of adjustments to it.What method of calculating cash flow from operations are they using?

A)Direct method
B)Indirect method
C)Net income method
D)Cash equivalents method

Question 38

A company sold a piece of land for $40,000 which had an original cost $25,000.What is the cash flow effect of this transaction?

A)A $15,000 increase in cash flows from operations.
B)A $40,000 increase in cash flows from operations.
C)A $15,000 increase in cash flows from investing activities.
D)A $40,000 increase in cash flows from investing activities.

Question 39

If a company had an overdraft at the bank, how would it be classified on the cash flow statement?

A)As a cash flow from operations.
B)As a cash flow from investing activities.
C)As a cash flow from financing activities.
D)As a cash and cash equivalent.

Question 40

Which of the following would be classified as a cash flow from financing activities on the cash flow statement?

A)Interest received.
B)Dividends paid.
C)Purchase of an intangible asset to be used in operations.
D)Purchase of the securities of another company to be held for the long-term.

Question 41

Kanaskas Corp.had the following activities during the year: $$\begin{array} { l r } \text { Proceeds from the sale of land } & \$ 300,000 \\\text { Gain on sale of land } & \$ 50,000 \\\text { Proceeds from the issue of common shares } & \$ 1,000,000 \\\text { Purchase of equipment } & \$ 450,000 \\\text { Repayment of mortgage outstanding on the sold land } & \$ 200,000 \\\text { Interest paid } & \$ 22,500 \\\text { Dividends paid } & \$ 10,000\end{array}$$ What was Kanaskas' cash flow from investing activities for the year?

A)$350,000 outflow
B)$150,000 outflow
C)$100,000 outflow
D)$850,000 inflow

Question 42

Kanaskas Corp had the following activities during the year: $$\begin{array} { l r } \text { Proceeds from the sale of land } & \$ 300,000 \\\text { Gain on sale of land } & \$ 50,000 \\\text { Proceeds from the issue of common shares } & \$ 1,000,000 \\\text { Purchase of equipment } & \$ 450,000 \\\text { Repayment of mortgage outstanding on the sold land } & \$ 200,000 \\\text { Interest paid } & \$ 22,500 \\\text { Dividends paid } & \$ 10,000\end{array}$$ What was Kanaskas' cash flow from financing activities for the year?

A)$767,500 inflow
B)$790,000 inflow
C)$800,000 inflow
D)$1,000,000 inflow

Question 43

The following information pertains to Brockville Inc.for 2012.If Brockville prepares their cash flow statement using the direct method, what was their cash paid to suppliers for the year when calculating their cash flow from operations? $$\begin{array} { l r } \text { Inventory January 1 } & \$ 300,000 \\\text { Inventory December 31 } & \$ 335,000 \\\text { Accounts payable January 1 } & \$ 45,000 \\\text { Accounts payable December 31 } & \$ 48,000 \\\text { Cost of goods sold during 2012 } & \$ 2,400,000\end{array}$$

A)$32,000
B)$35,000
C)$2,432,000
D)$2,435,000

Question 44

Cornwall Co reported a wage expense of $250,000 during 2014.Wages payable on January 1, 2014, were $5,000 and on December 31st were $7,500.If Cornwall prepares their cash flow statement using the direct method, what was their cash expenditure on wages for the year when calculating their cash flow from operations?

A)$242,500
B)$247,500
C)$252,500
D)$255,000

Question 45

The following information was available for Kingston Co.for 2012. $\begin{array}{ll}\text { Cash inflows from financing activities }&\$225,000\\\text { Cash outflows from investing activities }&\$415,000\\\text { Cash inflows from operations }&\$172,500\end{array}$
What was Kingston's change in cash for 2012?

A)$17,500 increase
B)$17,500 decrease
C)$172,500 increase
D)$172,500 decrease

Question 46

Minnis Limited reported cash flow from operations of $103,000 for the year.A review of the company's balance sheet and income statement also showed the following: $\begin{array}{ll}\text { Amortization expense for the year } & \$ 37,000 \\\text { Increase in accounts receivable } & \$ 19,000 \\\text { Decrease in inventory } & \$ 30,000 \\\text { Decrease in accounts payable } & \$ 30,000\\\end{array}$ What was Minnis's net income for the year?

A)$66,000
B)$85,000
C)$121,000
D)$159,000

Question 47

Minnis Limited reported revenues of $460,000 and total expenses of $375,000.A review of the company's balance sheet and income statement also showed the following: $\begin{array}{ll}\text { Amortization expense for the year } & \$ 37,000 \\\text { Increase in accounts receivable } & \$ 19,000 \\\text { Decrease in inventory } & \$ 30,000 \\\text { Decrease in accounts payable } & \$ 30,000\\\end{array}$ What was the cash flow from operations for Minnis?

A)$29,000
B)$85,000
C)$103,000
D)$141,000

Question 48

Bata Ltd.made sales of $500,000 during 2013.Accounts receivable on January 1, 2013, were $65,000, and on December 31st were $72,000.If Bata prepares their cash flow statement using the indirect method, what adjustment to the net income will be made for the year for Bata when calculating their cash flow from operations?

A)$7,000 added back to net income
B)$7,000 deducted from net income
C)$65,000 added back to net income
D)$72,000 deducted from net income

Question 49

Cornwall Co.reported a wage expense of $250,000 during 2014.Wages payable on January 1, 2014, were $5,000, and on December 31st were $7,500.If Cornwall prepares their cash flow statement using the indirect method, what adjustment to the net income will be made for the year for Cornwall when calculating their cash flow from operations?

A)$2,500 added back to net income
B)$2,500 deducted from net income
C)$5,000 added back to net income
D)$7,500 deducted from net income

Question 50

Cho Limited reported cash flow from operations of $136,000 for the year.A review of the company's balance sheet and income statement also showed the following: $\begin{array}{lr}\text { Amortization expense for the year } & \$ 16,000 \\\text { Increase in accounts receivable } & \$ 30,000 \\\text { Decrease in inventory } & \$ 18,000 \\\text { Increase in accounts payable } & \$ 5,500 \\\text { Decrease in interest payable } & \$ 3,000\end{array}$ What was Cho's net income for the year?

A)$110,500
B)$120,000
C)$126,500
D)$129,500

Question 51

When using the indirect approach, which of the following would lead to a decrease in the cash flows from operations?

A)An increase in accounts receivable
B)A decrease in accounts receivable
C)An increase in accounts payable
D)An increase in dividends paid

Question 52

Cho Limited reported net income of $129,500 for the year.A review of the company's balance sheet and income statement also showed the following: $\begin{array}{lr}\text { Amortization expense for the year } & \$ 16,000 \\\text { Increase in accounts receivable } & \$ 30,000 \\\text { Decrease in inventory } & \$ 18,000 \\\text { Increase in accounts payable } & \$ 5,500 \\\text { Decrease in interest payable } & \$ 3,000\end{array}$ What was Cho's cash flow from operations for the year?

A)$136,000
B)$139,000
C)$145,500
D)$155,000

Question 53

When using the indirect approach, which of the following would lead to an increase in the cash flows from operations?

A)An increase in accounts receivable
B)A decrease in accounts receivable
C)A decrease in accounts payable
D)An increase in dividends paid

Question 54

The following information was available for Prescott Inc.for 2014. $\begin{array}{ll}\text { Cash inflows from financing activities } & \$ 225,000 \\\text { Cash outflows from investing activities } & \$ 415,000\\\text { Change in cash for the year }&\$(17,500)\end{array}$ What were Prescott's cash flows from operations for 2014?

A)$207,500 inflow
B)$172,500 inflow
C)$172,500 outflow
D)$207,500 outflow

Question 55

Bata Ltd.made sales of $500,000 during 2013.Accounts receivable on January 1, 2013, were $65,000, and on December 31st were $72,000.If Bata prepares their cash flow statement using the direct method, what was the cash collected from customers for the year for Bata?

A)$438,000
B)$493,000
C)$500,000
D)$565,000

Question 56

A company had cash revenues of $200,000, cash expenses of $150,000, amortization expense of $15,000, and a gain on the sale of a piece of land of $4,000.What was their cash from operations for the year?

A)$35,000
B)$39,000
C)$50,000
D)$54,000

Question 57

Lethbridge Ltd.had the following activities with creditors and shareholders during the year: $$\begin{array} { l r } \text { Proceeds from long-term bank loan } & \$ 200,000 \\\text { Cash dividends paid to shareholders } & \$ 80,000 \\\text { Interest paid on bank loan } & \$ 12,000\end{array}$$ What was Lethbridge's cash flow from financing activities for the year?

A)$200,000 inflow
B)$178,000 inflow
C)$120,000 inflow
D)$108,000 inflow

Question 58

A company had cash revenues of $200,000, cash expenses of $150,000, amortization expense of $15,000, and a gain on the sale of a piece of land of $4,000.What was the difference between their net income and their cash from operations for the year?

A)Net income was $11,000 lower
B)Net income was $15,000 lower
C)Net income was $4,000 higher
D)Net income was $11,000 higher

Question 59

The following information pertains to Brockville Inc.for 2014.If Brockville prepares their cash flow statement using the indirect method, what adjustment to the net income will be made for the year for Brockville when calculating their cash flow from operations? $$\begin{array} { l r } \text { Inventory January 1, } & \$ 300,000 \\\text { Inventory December 31, } & \$ 335,000 \\\text { Accounts payable January 1 } & \$ 45,000 \\\text { Accounts payable December } 31 & \$ 48,000 \\\text { Cost of goods sold during 2014 } & \$ 2,400,000\end{array}$$

A)$35,000 added to net income
B)$35,000 deducted from net income
C)$32,000 added to net income
D)$32,000 deducted from net income

Question 60

Drumheller Inc.had the following activities during the year: $\begin{array}{lr}\text { Proceeds from the sale of land } & \$ 346,000 \\\text { Gain on sale of land } & \$ 46,000 \\\text { Proceeds from the issue of common shares } & \$ 800,000 \\\text { Purchase of equipment } & \$ 450,000\end{array}$ What was Drumheller's cash flow from investing activities for the year?

A)$104,000 outflow
B)$58,000 outflow
C)$696,000 inflow
D)$742,000 inflow

Question 61

Which of the following statements about liquidity is correct?

A)Shareholders have little interest in liquidity.
B)Liquidity refers to the long term viability of the firm.
C)Liquidity in private companies is usually greater than in public companies.
D)Liquidity refers to the ability of the company to meet its short term obligations.

Question 62

A new, fast-growing company may typically have which of the following patterns of cash flows?

A)Negative CFO, cash outflows from financing activities, and cash inflows from investing activities
B)Negative CFO, cash inflows from financing activities, and cash outflows from investing activities
C)Positive CFO, cash outflows from financing activities, and cash inflows from investing activities
D)Positive CFO, cash inflows from financing activities, and cash outflows from investing activities

Question 63

A company has incurred some routine maintenance costs.If they decide to capitalize these costs instead of expensing them, what would be the effect on CFO and cash flow from investing activities (CFI) in that period? $\begin{array}{ll}&\text { CFO } & \text { CFI } \\A.&\text { increase } & \text { increase } \\B.&\text { increase } & \text { decrease } \\C.&\text { decrease } & \text { increase } \\D.&\text { decrease } & \text { decrease }\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question 64

An investor interested in ensuring that the company is maintaining their productive capacity would look for which of the following cash flows?

A)Cash outflows for operations
B)Cash outflows for financing activities
C)Cash outflows for investing activities
D)Free cash flow

Question 65

What is Williamstown's cash flow from financing activities for its first year?

A)$153,000 inflow
B)$164,000 inflow
C)$165,500 inflow
D)$210,500 inflow

Question 66

An important source of information about liquidity can be inferred by examining a company's:

A)net income from operations.
B)cash on the balance sheet.
C)Sales revenues.
D)cash from operations.

Question 67

A stable, mature company may typically have which of the following patterns of cash flows?

A)Positive CFO, cash outflows from financing activities, and cash inflows from investing activities
B)Positive CFO, cash inflows from financing activities, and cash outflows from investing activities
C)Positive CFO, cash outflows from financing activities, and cash outflows from investing activities
D)Positive CFO, cash inflows from financing activities, and cash inflows from investing activities

Question 68

Which of the following statements about solvency is correct?

A)Shareholders have little interest in solvency.
B)Solvency refers to the long term viability of the firm.
C)Solvency in private companies is usually greater than in public companies.
D)Solvency refers to the ability of the company to meet its short term obligations.

Question 69

One important analytical tool that measures the company's ability to meet current liabilities is called:

A)debt to equity ratio.
B)profit margin ratio.
C)free cash flow
D)operating cash flows to current liabilities ratio.

Question 70

What is Williamstown's cash flow from investing activities for its first year?

A)$135,000 outflow
B)$127,000 outflow
C)$125,000 outflow
D)$115,000 outflow
(10,000 - 125,000)

Question 71

What is Williamstown's cash flow from operations for its first year?

A)$524,500 inflow
B)$570,500 inflow
C)$580,500 inflow
D)$600,500 inflow

Question 72

What is Crane's cash flow from operations for its first year?

A)$360,100 inflow
B)$391,100 inflow
C)$409,900 inflow
D)$502,000 inflow

Question 73

What is Crane's cash flow from investing activities for its first year?

A)$228,000 outflow
B)$236,000 outflow
C)$254,000 outflow
D)$434,000 outflow

Question 74

Which of the following is not a way that managers can manipulate cash?

A)By reducing the amount spent on advertising and promotion.
B)By paying suppliers more slowly.
C)By selling off some capital assets.
D)By increasing the amortization period for an intangible asset.

Question 75

Which of the following best defines free cash flow?

A)CFO - Capital expenditures
B)CFO - CFI - Dividends
C)CFO - CFI - CFF
D)CFO - CFF - Capital expenditures

Question 76

What is Crane's cash flow from financing activities for its first year?

A)$191,600 inflow
B)$193,500 inflow
C)$211,500 inflow
D)$214,000 inflow

Question 77

The following information was available for Belleville Corp for the 2012 fiscal year: $$\begin{array} { l r } \text { Cash inflow from financing activities } & \$ 225,000 \\\text { Cash outflow from investing activities } & \$ 415,000 \\\text { Cash inflow from operations } & \$ 372,500 \\\text { Dividends paid } & \$ 25,000 \\\text { Amount spent on capital expenditures } & \$ 300,000\end{array}$$ What is Belleville's free cash flow for 2012?

A)$(67,500)
B)$72,500
C)$47,500
D)$347,500

Question 78

What is Crane's cash balance at the end of its first year?

A)$349,400
B)$31,500
C)$476,000
D)$857,400

Question 79

A potential investor interested in assessing a company's ability to pay dividends would be interested in which of the following cash flows?

A)Cash inflows from operations
B)Cash outflows from investing activities
C)Cash inflows from financing activities
D)Cash outflows from financing activities

Question 80

The following information was available for Trenton Inc.for the 2014 fiscal year. $\begin{array}{lr}\text { Cash inflow from financing activities } & \$ 1,350,000 \\\text { Cash outflow from investing activities } & \$ 1,625,000 \\\text { Cash inflow from operations } & \$ 750,000 \\\text { Amount spent on capital expenditures } & \$ 1,200,000\\\text { Free cash flow for the year }&(\$500,000)\end{array}$ How much did Trenton spend on dividends in 2014?

A)$50,000
B)$75,000
C)$375,000
D)$425,000