Question

A firm purchases goods on credit worth $90. The same firm pays off $100 in old credit purchases.
An investment is made via the purchase of a new facility, and equity is issued in the amount of $180 to pay for the purchase.


What is the change in net cash provided by investments?

Answer 1

Answer:

$180 decrease

Explanation:

Note that the question is the net change in cash provided by investments, thus, since purchasing goods on credit and paying credit purchases do not qualify as investments, only the equity issued to pay for the purchase of the new facility should be considered.

Therefore, cash decreased by $180.