Econ Services' Statement of Cash Flows Indicates a $73,000 Increase

question 61

Multiple Choice

Econ Services' statement of cash flows indicates a $73,000 increase in cash during the year.The statement also indicates that the company used $42,000 for operating activities and $89,000 was provided by financing activities.How much was net cash provided/(used) by investing activities?

• A)$204,000
• B)($58,000)
• C)$26,000
• D)($47,000)

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Definitions:

Net Operating Income

An accounting term that represents the revenue minus the cost of goods sold and operating expenses, excluding taxes and interest.

Degree Of Operating Leverage

A measure, at a given level of sales, of how a percentage change in sales will affect profits. The degree of operating leverage is computed by dividing contribution margin by net operating income.

Variable Expenses

Costs that vary in direct proportion to changes in an activity level or volume, such as sales commissions.

Sales Increase

The rise in the volume or amount of sales or revenue a company achieves in a specific period compared to a previous period.