Looking forward to next year if Chesters current cash balanc

Looking forward to next year, if Chester\'s current cash balance is $20,201 (000) and cash flows from operations next period are unchanged from this period and Chester takes ONLY the following actions relating to cash flows from investing and financing activities: Issues 100 (000) shares of stock at the current stock price Issues $200 (000) of long-term debt Pays $40 (000) in dividends Which of the following activities will expose Chester to the most risk of needing an emergency loan? Select: 1 Save Answer Sells $5,000 (000) of their Long-term assets Retires $20,000 (000) in long-term debt Liquidates the entire inventory Purchases assets at a cost of $15,000 (000)

Solution

Answer :- Option 1). Sells $5,000 (000) of their long-term assets.

Explanation :- Selling of long-term assets amounting $ 5,000 (000) by Chester will definitely expose him to the risk of needing emergency loan in future.

Conclusion :- Sells $5,000 (000) of their long-term assets. (Option 1).