Dow Construction Company Reports a Net Use of Cash for Investing

question 73

Multiple Choice

Dow Construction Company reports a net use of cash for investing activities of $1.2 million and a net source of cash provided by financing of $.8 million. What was the effect on the cash balance?

• A) To cause the balance to increase by $.8 million.
• B) To cause the balance to decrease by $.4 million.
• C) To cause the balance to increase by $.4 million.
• D) Undeterminable because the beginning cash balance was not given.

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Definitions:

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders, but not retired, and may resell in the future.

Cash

Money in the form of coins or banknotes, especially that issued by a government, and available for immediate use in transaction.

Par Value

The nominal or face value of a bond, stock, or other financial instrument, as stated by the issuer.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.