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Questions

ACCT10001_2025_SM2 Practice Exam 2

True/False

A company reports the following cash flow statement information: Total cash inflows from operative activities: $430 Total cash outflows from investing activities: $520 Total cash outflows from financing activities: $100 From a creditor’s perspective, the cash flow information is concerning as it points to a problematic liquidity position of the firm.

Options
A.True
B.False
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Step-by-Step Analysis
The question presents cash flow statement data and asks to judge whether, from a creditor’s perspective, the information is concerning for liquidity. Option 1 (True): The firm’s overall cash flow is 430 in operating activities minus 520 in investing activities and minus 100 in financing activities, which equals -190. ......Login to view full explanation

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