1. At the beginning of the year, long-term debt of a firm is $1,430,000 and total debt is $3,080,000. At the end of the year, long-term debt is $1,328,000 and total debt is $3,512,400. The interest paid is $86,000. What is the amount of the cash flow to creditors?
a. -$102,000
b. $188,000
c. $86,000
d. $16,000
e. $224,000
2. Looney Entertainment has net income of $1,615,000. The firm pays out 40 percent of the net income to its shareholders as dividends. During the year, the company sold $620,000 worth of common stock. What is the cash flow to stockholders?
a. $35,000
b. $72,000
c. -$35,000
d. $45,000
e. $26,000