A Company Reported the Following Information in Its 2014 Annual

question 31

Multiple Choice

A company reported the following information in its 2014 annual report: $\begin{array}{ll}\text { Cash flows from operating activities } &\$295,000 \\\text { Additions to property, plant and equipment } &110,000 \\\text { Proceeds from disposals of property, plant and equipment } &57,000 \\\text { Total payments expected to retire long-term debt over the next 5 years } &250,000\end{array}$ What is the cash flow adequacy ratio for 2014?

• A)6.96
• B)5.90
• C)3.70
• D)0.74

---

Definitions:

Legal Fiction

A fact assumed or created by courts for legal reasons, especially one that is contrary to the actual fact, but is used to enable a legal decision.

Unpaid Taxes

Taxes owed to a government body that have not been paid by the specified due date.

Environmental Harm

Damage caused to the natural environment due to human activities or natural disasters, often leading to biodiversity loss, pollution, and climate change.

Fiduciary Duty

A legal or ethical relationship of trust where one party, known as a fiduciary, is required to act in the best interest of another party, typically a beneficiary.