Catalina Company Reported a Net Loss of $15,000 for the Year

question 73

Multiple Choice

Catalina Company reported a net loss of $15,000 for the year ended December 31, 2017. During the year, accounts receivable decreased $7,500, inventory increased $12,000, accounts payable increased by $15,000, and depreciation expense of $9,000 was recorded. During 2017, operating activities

• A)used net cash of $4,500.
• B)used net cash of $10,500.
• C)provided net cash of $4,500.
• D)provided net cash of $10,500.

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Definitions:

Multifactor APT

A model in financial markets that describes how the returns of an asset can be determined by its exposure to multiple risk factors, as per the Arbitrage Pricing Theory.

Risk Premiums

The additional return expected by an investor for taking on a higher risk compared to a risk-free investment.

No Arbitrage

A principle stating that it is impossible to achieve risk-free profits from inconsistent or mispriced asset prices in efficient markets, as arbitrage opportunities are quickly exploited and corrected.

Risk Premium

The extra return over the risk-free rate that investors require to compensate them for the risk of holding a risky asset.