1.In the current year, a company paid interest of $40,000, had net capital expenditures of $300,000, and reduced outstanding debt by $75,000.In addition, the company reported cash flow from operating activities of $600,000, cash flow from investing activities of ($250,000), and cash flow from financing activities of $65,000.The marginal tax rate is 35%. Compute the free cash flow to equity holders.

$375,000

$340,000

$326,000

$225,000

2.The unearned revenue account increased during the year.This is a ___________ of cash reported in the _____________ section of the statement of cash flows.

Use; operating

Source; operating

Use; investing

Source; investing

Use; financing

Source; financing

Please show some work and provide explanation. Thanks