Danielle's Sushi Shop Last Year Had (1) a Negative Net

question 40

Multiple Choice

Danielle's Sushi Shop last year had (1) a negative net cash flow from operations, (2) a negative free cash flow, and (3) an increase in cash as reported on its balance sheet.Which of the following factors could explain this situation?

• A) The company had a sharp increase in its depreciation and amortization expenses.
• B) The company had a sharp increase in its inventories.
• C) The company had a sharp increase in its accrued liabilities.
• D) The company sold a new issue of common stock.
• E) The company made a large capital investment early in the year.

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Definitions:

Diaphragm

A large, dome-shaped muscle located at the base of the lungs and thoracic cavity that contracts and relaxes to aid in the breathing process by creating a vacuum that pulls air into the lungs.

Elastic Properties

Characteristics of materials that allow them to stretch and return to their original shape without permanent deformation.

External Intercostal Muscles

The External Intercostal Muscles are a group of muscles found between the ribs that aid in the process of inhalation by elevating the ribcage, expanding the thoracic cavity.

Pleural Cavity

The thin fluid-filled space between the two pulmonary pleurae of each lung, involved in respiratory mechanics.