During 2009, Raines Umbrella Corp. had sales of $732,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $562,000, $97,000, and $131,000, respectively. In addition, the company had an interest expense of $101,000 and a tax rate of 40 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raines Umbrella Corp. paid out $16,000 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what is the firm's net new long-term debt?

Multiple Choice

a. $89,000

b. $44,000

c.$18,500

d. $73,450

e. $0

2. The 2008 balance sheet of Maria's Tennis Shop, Inc., showed long-term debt of $2.5 million, and the 2009 balance sheet showed long-term debt of $3.65 million. The 2009 income statement showed an interest expense of $360,000. What was the firm's cash flow to creditors during 2009?

Multiple Choice

a. $1,150,360

b. $-790,000

c.$-361,150

d. $-358,850

e. $1,150,000