Muffy's Muffins had a net income of $2605. The firm retains 60 percent of net income. During the year, the company sold $535 in common stock. What was the cash flow to shareholders? A) $507. B) $1577. C) $1028. D) $1042. E) $2098.

Muffy's Muffins had a net income of $2605. The firm retains 60 percent of net income. During the year, the company sold $535 in common stock. What was the cash flow to shareholders? A) $507. B) $1577. C) $1028. D) $1042. E) $2098.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 6P: In its most recent financial statements, Del-Castillo Inc. reported 70 million of net income and 900...

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Question

What is the cash flow to shareholders?

Muffy's Muffins had a net income of $2605. The firm
retains 60 percent of net income. During the year, the
company sold $535 in common stock. What was the
cash flow to shareholders?
A) $507.
B) $1577.
C) $1028.
D) $1042.
E) $2098.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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