Reference no: EM132932013

For Company ABC in the year 2020, cash was generated/spent from the following sources:

operations $235,000
investments $(120,000)

Also, cash levels at the end of both years are also available:

cash level at end of 2019 $100,000
cash level at end of 2020 $123,000
ABC did not issue any new common shares nor did it buy back any of its outstanding shares in 2020.

In 2020, the company retired $100,000 of its long-term-debt outstanding. It also borrowed an additional $17,000 from its friendly bank.

Problem 1: In 2020, the amount of cash generated from financial activities was:

Select one:

a. $ 138,000

b. $ (138,000)

c. $ 23,000

d. $ (92,000)

e. $ 92,000

Problem 2: The amount of cash dividends paid in 2020 is:

Select one:

a. $ 0

b. $ 9,000

c. $ 13,000

d. $ 17,000

e. none of the above

Problem 3: A firm is experiencing cash flow difficulties. Which of the following types of loans would allow it to obtain cash in the easiest manner?

Select one:

a. They have a committed line of credit on which they owe nothing presently

b. They have an uncommitted line of credit which they have drawn to the limit

c. They can issue new long-term bonds

d. They can apply for a short-term unsecured loan

e. They can apply for a secured loan