Sean McNama is a renowned medical researcher at a large Canadian university. For many years he has been working on a technology that could significantly improve the vision of visually impaired people. In late 2016, Sean in corporated a company, McNama Vision Research Ltd. (MVR), that will further develop the technology and ultimately bring it to market. Shares of MVR were sold to venture capitalists who think the company has a reasonable chance of being hugely successful. In 2017, MVR completed its state-of-the-art research centre near the university. Money was used to buy equipment and renovate the facility so it would be suitable. Money is also being used to provide operating funds (to pay salaries, rent, utilities, and other operating costs) until MVR has developed a product it can bring to market. Sean is hoping to have something to sell by 2020. Equipment continues to be purchased when it's needed.

What pattern of cash flows would you expect to see if you examined the MVR cash flow statement for 2017? That is, would you expect operating, investing, and financing cash flows to be positive or negative? Explain your answer fully. Be sure to make refer ence to business conditions faced by the company.

  • CreatedFebruary 26, 2015
  • Files Included
Post your question