During 2014, Tommy's Toys reported the following: long-term debt repayments, $503 million; interest paid, $143 million; proceeds from exercise of stock options, $27 million, and issue of common stock in exchange for land costing $10 million. What is the 2014 net cash flow from financing activities?
A) $476 million net cash outflow.
B) $530 million net cash outflow.
C)$673 million net cash outflow.
D)$76 million net cash outflow.

Question

Quizplus · Accepted Answer

Net cash flow from financing activities is calculated as: long-term debt repayments ($503 million) + interest paid ($143 million) - proceeds from exercise of stock options ($27 million) = $619 million net cash outflow. However, the issue of common stock in exchange for land is a non-cash transaction and does not affect cash flow. Therefore, the net cash outflow is $476 million.

During 2014, Tommy's Toys Reported the Following: Long-Term Debt Repayments