In preparing Tywin Company's statement of cash flows for the most recent year,the following information is available: Net cash flows from investing activities for the year were:

A) $438,000 of net cash used.
B) $438,000 of net cash provided.
C) $264,000 of net cash used.
D) $351,000 of net cash used.
E) $264,000 of net cash provided.

Question

In preparing Tywin Company's statement of cash flows for the most recent year,the following information is available:

Net cash flows from investing activities for the year were:

A) $438,000 of net cash used.
B) $438,000 of net cash provided.
C) $264,000 of net cash used.
D) $351,000 of net cash used.
E) $264,000 of net cash provided.

Asisipho Cengani · Accepted Answer

Final Answer : C, Explanation :  The question does not provide any information that directly relates to net cash flows from investing activities. Therefore, we can assume that we need to calculate this figure using other information provided in the statement of cash flows. One way to do this is to use the formula: Net cash flows from investing activities = Cash inflows from investing activities - Cash outflows from investing activities. By looking at the statement of cash flows, we can see that there were cash outflows of $264,000 for the purchase of property, plant, and equipment. Therefore, the net cash flows from investing activities would be $264,000 of net cash used (or cash outflows), which is option C.

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