An Example of a Company with Cash Flow Problems Is

question 89

Multiple Choice

An example of a company with cash flow problems is:

• A)a company sold property, plant and equipment for $160 million and purchased property, plant and equipment for $80 million.
• B)a company borrowed $1 million with long-term bonds payable and paid $1 million on long-term notes payable.
• C)a company sold property, plant and equipment for $5 million and purchased property, plant and equipment for $25 million.
• D)net cash provided by operating activities is $10 million and net income is $6 million.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or another financial instrument, as stated by the issuing company.

Fair Value

The capital acquired from the sale of an asset or expended in the transfer of a liability in a smooth transaction among market intermediaries on the measurement date.

Acquisition

The process by which one company takes over the control of or purchases another company.

Appraised Value

An estimate of the fair value of an asset, determined by a professional appraiser based on inspection and analysis of the asset and market conditions.