The Zoe Company manufactures lamps in Toronto, Ontario. The company has raised $800,000 from an issue of common shares. The company paid off a long-term bank loan of $400,000. The also borrowed $1,200,000 by way of a mortgage on a building it purchased for $1,500,000.

Required a) Calculate the cash used in or cash from financing activities. Explain the reasoning why a company may prefer financing either by way of issuing common shares or by borrowing long term from a Bank.