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activities section of the 7) Which of the following are the activities that are included in the operating statement of cash flows? A) activities that obtain the cash needed to launch and sustain the business B) activities that pertain to construction of new facilities C) activities that increase or decrease long-term assets D) activities that create revenue or expenses 8) The price/eamings ratio indicates the: A) proportion of total assets financed by debt. B) ease of selling merchandise inventory C) dividend yield of the company D) market price of $1 of earnings. 9) Which of the following is the typical order of the sections on a statement of cash flows? B) investing, operating, financing D) operating, investing, financing A) financing, investing, operating C) operating, financing, investing 10) Cash borrowed on a mortgage note would be a(n)activity on the statement of cash flows A) financing B) investing C) operating D) non-cash 11) Rodriguez Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Rodriguez Inc. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/decrease Cash Accounts Receivable Inventory Plant and Equipment Accumulated Depreciation-Plant and Equipment Total assets $21,000 $18,000 31,000 35,000 53,000 25,000 123,000 90,000 (43,000) (40,000) $228,000 $168,000 $3,000 (4,000) 28,000 33,000 (3,000) $60,000 Additional information provided by the company includes the following 1) Equipment costing $65,000 was purchased for cash, 2) Equipment with a cost of $32,000 and accumulated depreciation of $7,000 was sold for $45,000. What was the amount of net cash provided by (used for) investing activities? A) $120,000 B) $(20,000) C) $20,000 D) $(120,000) 12) Which of the following is one of the purposes of the statement of cash flows? A) to predict future profit growth B) to predict the ability of a company to pay debts and dividends C) to calculate the turnover of inventory D) to evaluate the level of debt and leverage of a company

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