Last Year, Blanda Brothers Had Positive Net Cash Flow, Yet

question 58

Multiple Choice

Last year, Blanda Brothers had positive net cash flow, yet cash on the balance sheet decreased. Which of the following could explain the company's financial performance?

• A) The company issued new common stock.
• B) The company issued new long-term debt.
• C) The company sold off some of its assets.
• D) The company purchased a lot of new fixed assets.
• E) The company eliminated its dividend.

---

Definitions:

Bond Price

The market price at which a bond is traded, reflecting its current value as determined by interest rates, the bond's credit quality, and other factors.

Interest Payments

Payments made to lenders or creditors as compensation for borrowing money, typically calculated as a percentage of the principal amount.

Face Amount

The amount specified on the face of a bond and the amount for which it will sell if the market rate of interest equals the contract rate.

Market Rate

The prevailing interest rate or cost of borrowing expressed as a percentage, available in the financial markets.