A company has an net cash inflow from the year of R90 000. Their sales are R780 000 and cost of sales and other expenses are R360 000. The net amount of cash that was paid for additional property, plant and equipment was R100 000. Their inventory increased during the year by R100 000. Their retained earnings were R378 000 at the beginning of the financial year. They paid a dividend of R200 000.

In relationship to the above company, which of these statements are correct:-

i) there is no subjectivity in the cash flow statement.

ii) the dividend payment appears to be very large in relation to their distributable profits

iii) The net amount of cash paid for property, plant and equipment is not always a bad thing as companies need to invest in their future ability to generate income.

iv) None of the above statements appear to be correct.

Select one:

a. ii and iii only

b. v only

c. i and ii only

d. i and ii and iii only

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