Given the Following Information,determine the Amount of Cash Flows from Investing

question 105

Multiple Choice

Given the following information,determine the amount of cash flows from investing and financing activities.
$$\begin{array} { | l | r | } \hline \text { Net income } & \$ 70,000 \\\hline \text { Loss on sale of plant assets } & 25,000 \\\hline \text { Cash received from sale of plant assets } & 3 6 , 0 0 0\\\hline \text { Cash received from issuing stock } &8 0 , 0 0 0 \\\hline \text { Increase in income taxes payable } & 2 0 , 0 0 0 \\\hline\end{array}$$

• A)
• Cash provided by investing activities, \( \$ 11,000 \)
• Cash provided by financing activities, \( \$ 80,000 \)
• B)
• Cash used by investing activities, \( \$ 80,000 \)
• Cash used by financing activities, \( \$ 11,000 \)
• C)
• Cash provided by investing activities, \( \$ 80,000 \)
• Cash provided by financing activities, \( \$ 36,000 \)
• D)
• Cash used by investing activities, \( \$ 25,000 \)
• Cash used by financing activities, \( \$ 36,000 \)
• E)
• Cash provided by investing activities, \( \$ 36,000 \)
• Cash provided by financing activities, \( \$ 80,000 \)

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Definitions:

Tender Offer

Offer made by a company to the target company’s shareholders specifying a price and the form of payment.

Leverage Buyout

A financial transaction where a company is purchased using a significant amount of borrowed money to meet the acquisition cost.

Acquisition

The process of obtaining control of another company or business entity through purchase or merger.

Sovereign Wealth Fund

A state-owned investment fund comprised of pools of money derived from a country's reserves, used to invest in various financial assets.