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During the last year, Len Corp. generated $1,170.00 million in cash flow from operating activities and had negative cash flow generated from investing activities (-640.00 million). At the end of the first year, Len Corp. had $200 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm’s cash flow (CF) due to financing activities in the second year?

Respuesta :

Answer:

The firm’s cash flow (CF) due to financing activities in the second year is    - $450 million

Explanation:

As we know that,

Net increase in cash = Operating activity - investing activity - financing activity

where,

Net increase in cash = Ending balance of second year  - ending balance of first year

= $280 million - $200 million

= $80 million

The other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

$80 million = $1,170 million - $640 million + financing activity

$80 million = $530 + financing activity

So, financing activity = $80 million - $530 million

                                   = - $450 million

marvineetesh3

The term cash flow means the net amount of cash and cash equivalents which is being transferred in and out of a company.

The cashflow of the firm (CF) due to financing activities in the second year would be $450 million.

What is the cash flow?

Cash flow refers to the amount of cash that comes in and goes out of a company. Businesses in money from sales as revenues and pass money on to expenses.

Computation of cashflow due to financing activities:

Given,

Investing activity = $640 million,

Cashflow from operating activity = $1,170 million,

Closing balance of the second year= $280 million,

Closing balance of the first year=  $200 million,

Then net increase in cash would be:

[tex]\text{Net Increase In Cash = Closing balance of the second year - Closing balance of the first year}\\\\\\\text{Net Increase In Cash =\$280 million-\$200 million}\\\\\\\text{Net Increase In Cash =\$80million}[/tex]

Then,

[tex]\text{Net Increase in cash}= \text{Operating Activity- Investing Activity- Financing Activity}\\\\\\\$80\text{million = \$1,170 million - \$640 million - Financing Activity}\\\\\\\$80\text{million = \$530 million - Financing Activity}\\\\\\\text{Financing Activity = \$450million}.[/tex]

Therefore, the amount of cashflow from the financing activity would be $450 million.

Learn more about cashflow, refer:

https://brainly.com/question/3521575

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