The Information in the Following Table Is from the Statement

question 172

Multiple Choice

The information in the following table is from the statement of cash flows for a company at four different points in time (Period 1, Period 2, Period 3, and Period 4) . Negative values are presented in parentheses. $$\begin{array} { | l | r | r | r | r | } \hline & \text { Period 1 } & \text { Period 2 } & \text { Period 3 } & \text { Period 4 } \\\hline \text { Cash provided by operations } & \$ & \$ 90,000 & \$ 360,000 & \$ 50,000 \\& ( 180,000 ) & & & \\\hline \text { Cash provided by investing } & ( 300,000 ) & 75,000 & 90,000 & ( 120,000 ) \\\hline \text { Cash provided by financing } & 290,000 & ( 220,000 ) & ( \$ 170,000 ) & \$ 420,000 \\\hline \text { Net income } & ( 120,000 ) & 30,000 & 300,000 & ( 15,000 ) \\\hline\end{array}$$ Based on this information, which of the following answers most likely corresponds with the introductory phase, growth phase, maturity phase, or decline phase?

• A) Period 2, Period 1, Period 3, Period 4.
• B) Period 1, Period 4, Period 3, Period 2.
• C) Period 3, Period 4, Period 1, Period 2.
• D) Period 4, Period 3, Period 2, Period 1.

Calculate the sales volume needed to attain a specific target profit.

Assess the financial viability of spending on advertising based on its potential to increase sales.

Understand the calculation and significance of the margin of safety percentage.

Recognize the effect of sales mix shifts on the break-even point.

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Definitions:

Annually Balancing

The process of adjusting or reconciling financial accounts or budgets to match or balance over a one-year period.

Cyclically Balanced Budget

A fiscal strategy where the government aims to balance its budget over the complete economic cycle, accumulating surpluses in boom periods and deficits during recessions.

Budget Deficits

A financial situation where a government's expenditures surpass its revenues.

Budget Surpluses

A situation where a government's revenue exceeds its expenditures over a specific period, indicating financial health.