The Following Information Has Been Provided to You by RKJ

question 5

Multiple Choice

The following information has been provided to you by RKJ Company: $$\begin{array} { l c } \text { Net income } & \$ 300,000 \\\text { Decrease in accounts payable } & \$ 114,000 \\\text { Increase in inventory } & \$ 22,000 \\\text { Increase in accounts receivable } & \$ 24,000 \\\text { Decrease in bonds payable } & \$ 25,000 \\\text { Loss on sale of a depreciable asset } & \$ 19,000 \\\text { Depreciation expense } & \$ 40,000 \\\text { Decrease in income taxes payable } & \$ 12,000\end{array}$$ What is the net cash flow from operating activities?

• A)$231,000
• B)$187,000
• C)$206,000
• D)$168,000

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Definitions:

Rational Risk Premia

The additional return required by investors for taking on additional risk in a rational and calculated manner.

Proprietary Wealth

Wealth that is owned and controlled by an individual or a company, often in the context of investments or intellectual property.

Market Rate of Return

The average rate of return expected by investors from a market or security index over a specific time period.

CAPM

Stands for the Capital Asset Pricing Model, a model that describes the relationship between the expected return of an asset and its risk.