The Following Information Is Provided for Identikit Ltd for the Period

question 33

Multiple Choice

The following information is provided for Identikit Ltd for the period ended 30 June 2005: All transactions are in cash unless otherwise indicated.What is the net cash flow from operating activities for the period?

• A) Cash inflow $371,000
• B) Cash inflow $298,000
• C) Cash outflow $554,000
• D) Cash inflow $530,000
• E) None of the given answers.

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Definitions:

Disbursement Float

The time lag between when a payment is made by writing a check and when the funds are actually removed from the payer's account.

Float Costs

The expenses associated with issuing new stocks or bonds, including underwriting, legal, and registration fees.

Optimal Cash Balance

The ideal amount of cash a company should hold to minimize both holding costs and transaction costs.

Float Cost Impact

The effect of delayed checks or securities settlements on the use of funds, which can affect a company's cash flow.