Question

At the end of 2004, Lehnhoff Inc. had $75 million in cash. During 2005, the following events occurred: · Cash flow from Lehnhoff's operating activities totaled $325 million. · Lehnhoff issued $500 million in common stock. · Lehnhoff's notes payable decreased by $100 million. · Lehnhoff purchased fixed assets totaling $600 million. How much cash did Lehnhoff Inc. have at the end of 2005?

a. $200 Million
b. $50 Million
c. $1.4 Billion
d. $100 Million

Answer 1

B. 50 million. Take 325 subtract it by 75 to see the growth which is 250. Take 250 and add 500, but subtract 100 and you get 650. He then spent 600 of that which leaves you with 50 million