A firm purchases goods on credit worth $150. The same firm pays off $100 in old credit purchases. An investment is made via the

Question

3 years ago

11

A firm purchases goods on credit worth $150. The same firm pays off $100 in old credit purchases. An investment is made via the

purchase of a new facility, and equity is issued in the amount of $300 to pay for the purchase.
What is the change in net cash provided by operations?

Business

1 answer:

enot [183] · Answer 1 · 2022-08-26T13:44:16+03:00

Answer:

$50 increase

Explanation:

Purchasing goods on credit and paying off credit purchases will reduce cash while issuing equity will increase cash. Cash flow from the three operations listed is:

Cash flow = - credit purchases - credit payments + cash raised for investment

Cash flow = -$150 -$100 + $300

Cash flow = $50