Terastar Corp What Is the Trend in Free Cash Flows Relative to

question 23

Multiple Choice

Terastar Corp.reports the following amounts for 2012 and 2013.
$$\begin{array} { | l | c | c | c | c | } \hline & \text { Net Income } & \text { Operating } & \text { Investing } & \text { Financing } \\\hline 2012 & \$ 10,000 & \$ 15,000 & - \$ 8,000 & \$ 10,000 \\\hline 2013 & 12,000 & 19,000 & - \$ 10,000 & - 6,000 \\\hline\end{array}$$
What is the trend in free cash flows relative to net income?

• A)Both are increasing.
• B)Net income is trending upward and free cash flows are trending downward.
• C)Both are decreasing.
• D)Net income is trending downward and free cash flows are trending upwarD.

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