1. Assume net income was $100,000, depreciation expense was $8,000, accounts receivable decreased by $7,500, and accounts payable decreased by $2,500. The amount of net cash flows from operating activities is:

a. $103,000.

b. $100,000.

c. $108,000.

d. $113,000.

2. The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year, respectively. Sales revenues are $800,000, net income is $100,000, and net cash flows from operating activities are $150,000. What is Computer Worlds' cash return on assets?

a. 33.3%.

b. 42.9%.

c. 25.0%.

d. 37.5%.