Question

Creative Sound Systems sold investments, land, and its own common stock for $31.0 million, $14.9 million, and $39.8 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $20.9 million, $24.9 million, and $11.9 million, respectively.

What amount should the company report as net cash flows from investing activities? (Cash outflows should be indicated with a minus sign. Round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).)

Answer 1

To calculate the net cash flows from investing activities, we need to sum up all the cash inflows and cash outflows from the investing activities.

Cash inflows:

Investments sold: $31.0 million

Land sold: $14.9 million

Common stock sold: $39.8 million

Cash outflows:

Treasury stock purchased: $20.9 million

Equipment purchased: $24.9 million

Patent purchased: $11.9 million

Now, let's calculate the net cash flows:

Net cash flows from investing activities = (31.0 + 14.9 + 39.8) - (20.9 + 24.9 + 11.9)

Net cash flows from investing activities = $85.7 million - $57.7 million

Net cash flows from investing activities = $28.0 million

So, the company should report a net cash flow from investing activities of $28.0 million.