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Answer to Question #5971 in Economics of Enterprise for Lamarcus Streeter

Question #5971
Last year Roussakis Company’s operations provided a negative net cash flow, yet the cash shown on its balance sheet increased. Which of the following statements could explain the increase in cash, assuming the company’s financial statements were prepared under generally accepted accounting principles?

a. The company repurchased some of its common stock.
b. The company dramatically increased its capital expenditures.
c. The company retired a large amount of its long-term debt.
d. The company sold some of its fixed assets.
e. The company had high depreciation expenses.
Expert's answer
d. The company sold some of its fixed assets.
That's why the cash shown on its balance sheet increased and there was a negative net cash flow, some assets where sold.

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