Question

Kleister Company issues bonds for $100 million and repays a long-term notes payable of $10 million. The company also sells its own shares for $12 million and pays cash dividends of $5 million. Cash inflows from financing activities will be:________

Answer 1

Answer: $112 mill

Step-by-step explanation:

100+12

Answer 2

$97 million cash inflow from financing activities.

Step-by-step explanation:

Given: Company issue bonds for $100 million

Repay long term notes payable is $10 million.

Company sell its own shares= $12 million

Pay cash dividend= $5 million.

Now, lets calculate the cash inflow from financing activities (CFF)

∴ Formula; Cash inflow from financing activities=
`\textrm{cash inflow from issuing equity or debt -(cash paid as dividend +repurchase of debt and equity)}`

Cash inflow are the item through which cash is flowing in the company.

∴ cash inflow=
`(\textrm{(cash inflow issuance of bonds and selling own shares)}`

Cash inflow=
`(100+12)= \$ 112\ million`

Cash inflow from financing activities=
`112-(10+5)= 112-15`

Cash inflow from financing activities is $97 million