Gladiator,Inc

question 88

Multiple Choice

Gladiator,Inc.uses the direct method to prepare its statement of cash flows.Use the following information reported for 2016 to compute the amount of cash paid for merchandise inventory.
Cost of Goods Sold,$135,000
Merchandise Inventory,beginning balance,$26,000
Merchandise Inventory,ending balance,$66,000
Accounts Payable,beginning balance,$7,900
Accounts Payable,ending balance,$5,100

• A)$177,800
• B)$95,000
• C)$175,000
• D)$172,200

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the valuation of investments or projects.

NPV

Net Present Value, a calculation used to assess the profitability of an investment or project, considering the time value of money.

Target Company

A firm that another company seeks to acquire.

Cost of Equity

The return that shareholders require for investing in a company's equity, representing the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.