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Juan is a financial expert and has acquired the following information for Palmer Products: ...

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Finance

Juan is a financial expert and has acquired the following information for Palmer Products:

Retained earnings on the year-end 2001 balance sheet was $700,000.

Retained earnings on the year-end 2002 balance sheet was $320,000.

The company does not pay dividends.

The companys depreciation expense is its only non-cash expense.

The company has no non-cash revenues.

The companys net cash flow for 2002 was $150,000.

On the basis of this information, which of the following statements is most correct?

Select one:

a.

Palmer Products had negative net income in 2002.

b.

Palmer Products had positive net income in 2002, but it was less than its net income in 2001.

c.

Palmer Products depreciation expense in 2002 was less than $150,000.

d.

Palmer Products net cash flow in 2002 must be higher than its net cash flow in 2001.

e.

Palmer Products cash on the balance sheet at the end of 2002 must be lower than the cash it had on its balance sheet at the end of 2001.

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