If the Opening Balance of Equity Is $45,000, the Closing

question 55

Multiple Choice

If the opening balance of equity is $45,000, the closing balance is $60,000 and profit is $27,000, calculate the amount of dividends paid (assume all dividends declared have been paid) which will appear as a financing outflow in the statement of cash flows.

• A)$15,000.
• B)$42,000.
• C)$12,000.
• D)Nil.

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Definitions:

Initial Investment

The amount of money used to start a project, purchase assets, or establish a business operation.

Net Present Value

The Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, often used to assess the profitability of an investment.

Minimum Rate

The lowest acceptable rate of return on an investment, often used in the evaluation of projects or financial decisions.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.