When Peter Mills Went to Withdraw $8,000 from the Lowe

question 4

Multiple Choice

When Peter Mills went to withdraw $8,000 from the Lowe Fidelity Mutual fund, he was informed that the fund would charge 3 percent of the amount withdrawn.What is the dollar amount of the withdrawal charge?

• A)$2,400
• B)$500
• C)$240
• D)$24
• E)It is impossible to calculate the withdrawal charge with this information.

---

Definitions:

Direct Method

A way of presenting the cash flow statement where major classes of gross cash receipts and cash payments are disclosed, providing insight into specific cash flow activities.

Indirect Method

A financial accounting technique used in cash flow statements to adjust net income for the effects of non-cash transactions.

Current GAAP

Generally Accepted Accounting Principles as they are presently defined and practiced in the United States for financial reporting.

Direct Method

A way of reporting cash flows from operating activities by showing major classes of gross cash receipts and payments.