The following are the cash flows for each of the independent cases. Case 1 Case 2 Case 3 Cash provided by (used for) operating activities $ 3,000 $ (120,000 ) $ 80,000 Cash provided by (used for) investing activities (70,000 ) 10,000 (40,000 ) Cash provided by (used for) financing activities 75,000 75,000 (30,000 ) Net change in cash 8,000 (35,000 ) 10,000 Cash position at beginning of year 2,000 40,000 30,000 Cash position at end of year $ 10,000 $ 5,000 $ 40,000 Classify each of the following cases as a growing start-up company (S), a healthy established company (E), or an established company facing financial difficulties (F).

Answer and Explanation:

The classification is as follows

For case 1

It is a growing start-up company (S) with the following reasons

a. The cash flow from operating activities is very less as compared to the financing and investing activities

b. It is a start company so in this case the financing and investing activities are more

c. Moreover, the beginning cash balance is also less

For case 2

It is an established company facing financial difficulties (F) with the following reasons

a. The operating activity is in a negative amount

b. It is an established company so it facing a lot of difficulties

c. Net cash flow is also in negative

For case 3

It is a healthy established company (E) with the following reasons

a. The operating activity is in a positive amount

b. Since it is a healthy established company so it shows the positive net cash flow and strong cash position

in terms of experimental research, mcdonald’s charging different prices in the two cities relates to

answertrue;