Based on the cash flow data in the table for Interceptors Inc.,which of the following statements is/are correct?
I.This firm appears to be a good investment because of its steady growth in cash.
II.This firm has only been able to generate growing cash flows by borrowing or selling equity to offset declining operating cash flows.
III.Financing activities have been increasingly important for this firm's operations,at least in the short run.
A) I only
B) II and III only
C) II only
D) I and II only

Question

Quizplus · Accepted Answer

The firm's growing cash flows are due to borrowing or selling equity, not from operations, indicating reliance on financing activities.

Based on the Cash Flow Data in the Table for Interceptors