Which of the following is a cash flow from operating activities? Select one or more: a

1. Which of the following is a cash flow from operating activities?
   Select one or more:
   a. Payment of a note payable.
   b. Sale of a piece of land no longer used in operations.
   c. Sale of long-term investments in common stock.
   d. Purchase of merchandise for resale.

d

2. Which of the following companies would you expect to report significant amounts of cash provided by financing activities?
   Select one or more:
   a. A large multinational pharmaceutical company.
   b. A yet-to-be-profitable biotechnology company.
   c. A profitable established company in the retail industry.
   d. A mature company operating in the oil refinery industry.

b

3. Which of the following is not one of the reasons why net income differs from cash flows from operations under the indirect method of calculating cash flows?
   Select one or more:
   a. sale or repurchase of capital stock
   b. changes in working capital accounts
   c. non-cash items, such as depreciation and amortization
   d. gains and losses related to the sale of plant, property and equipment

a

4. Normally, cash flows from operations will peak during which phase of the product life cycle?
   Select one or more:
   a. Introduction
   b. Decline
   c. Maturity
   d. Growth

c

5. In a statement of cash flows, interest received from sources other than a company's investments would be classified as cash inflows from:
   Select one or more:
   a. investing activities.
   b. financing activities.
   c. lending activities.
   d. operating activities.

d

6. Under the indirect method of preparing the statement of cash flows, add backs to net income include all of the following except:
   Select one or more:
   a. gains on sale of equipment
   b. deferred tax expense
   c. share-based compensation
   d. depreciation expense

a

7. A firm's cash flows will differ from net income each period for all of the following reasons except:
   Select one or more:
   a. cash expenditures to employees, suppliers, and governments do not necessarily occur in the same period in which a firm recognizes expenses.
   b. cash inflows and outflows that pertain to investing and financing activities do not immediately flow through the income statement.
   c. the company is sustaining losses each period.
   d. cash receipts from customers do not necessarily occur in the same period in which a firm recognizes revenues.

c

8. Academic research has found that market rates of return on common stock are the most highly correlated with:
   Select one or more:
   a. EBITDA.
   b. cash flow from operations.
   c. net income.
   d. cash flow from investing activities.

c

9. Which of the following transactions would not create a cash flow?
   Select one or more:
   a. Payment of a cash dividend.
   b. The company purchased some of its own stock from a stockholder.
   c. Amortization of patent for the period.
   d. Sale of equipment at book value (i.e. no gain or loss

c

10. All of the following are firms that may experience a long lag between the expenditures of cash and the receipt of cash from customers, except:
    Select one or more:
    a. restaurants
    b. wineries
    c. construction companies
    d. aerospace manufacturers

a