What Amounts Will Siebens Report on Its 2012 Statement of Cash

question 7

Multiple Choice

What amounts will Siebens report on its 2012 statement of cash flows?

• A) $0
• B) A cash outflow of $20,000 shown as an operating activity
• C) A cash outflow of $20,000 and an inflow of $800 for interest
• D) A cash outflow of $20,000 shown as an investing activity

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Definitions:

Price

The amount of money or consideration exchanged for the ownership or use of a good or service.

Business

An organization or enterprising entity engaged in commercial, industrial, or professional activities, often structured to produce and sell goods and services for profit.

Present Value

Present value represents the current value of a future amount of money or series of cash flows, discounted at a certain rate of return.

Discount Rate

In finance, the rate used to discount future cash flows to their present value, essentially reflecting the time value of money and risk.