ThisIsMyCo Inc. has been your business for the past several years. You have put together your cash flow statements for the past 3 years to get a better idea of how your business is managing cash flow.

Year ending December 31 2021 2020 2019

Cash flow from operations 31,000 32,000 30,000

Cash flow from investing -4,000 -3,000 -5,000

Cash flow from financing -20,000 -18,000 -15,000

Net change in cash 7,000 11,000 10,000

Cash, beginning of year 66,000 55,000 45,000

Cash, end of year 73,000 66,000 55,000

Profit for the year35,00034,00032,000

The next five questions relate to the cash flow statements below. The rest of the questions in this section of the exam are independent.

Question 1 (1 point)

Saved

Which section of the cash flow statement is considered the most important? Why?

Question 1 options: a)investing, because it shows how much the company has spent on long-lived assets

b)the change in cash, because it shows the year-over-year difference

c)financing, because it shows how much the company has borrowed

d)operating, because it is the only sustainable source of cash

e)All are considered equally important.

Question 2 (1 point)

Saved

Which life-cycle stage was the business most likely in, back in 2019?

Question 2 options: a)growth

b)maturity

c)decline

d)either growth or start-up

e)start-up

Question 3 (1 point)

Saved

Which life-cycle stage is the business most likely in by 2021?

Question 3 options: a)either maturity or growth

b)growth

c)maturity

d)decline

e)start-up

Question 4 (1 point)

Cash flow from investing activities has been fairly steady, and slightly negative, throughout this period. Which of the following transactions can cause investing cash flow to be negative?

Question 4 options: a)lower depreciation expense

b)disposal of long-lived assets

c)receiving contributions from owners

d)purchasing or replacing long-lived assets

e)borrowing from the bank

f)lower dividends

Question 5 (1 point)