Question
Arapaho Inc. is an independent energy company that engages in the exploration, development, and production of crude oil , and natural gas liquids in the
Arapaho Inc. is an independent energy company that engages in the exploration, development, and production of crude oil , and natural gas liquids in the United States and Canada. Arapaho's cash flow statement for 2010 (in millions of dollars) is found below:
Net income $ 2,800
Depreciation expense 2,400
Changes in working capital (600)
Cash from operating activities $4,600
Capital expenditures (5,000)
Cash from investing activities $(5,000)
Total dividends paid (200)
Issuance (retirement) of stock 50
Issuance (retirement) of debt 400
Cash from financing activities $ 250
Net change in cash $ (150)
a. How much cash did the firm generate from its operations over the year? Describe what happened to the firm's net working capital over the year.
b. How much cash did the firm invest in new capital expenditures and other investing activities in 2010?
c. What sources of financing did the company use to raise money during 2010? d. How did the firm's cash balance change during 2010?
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