Refer to the data in E17–4 for Ontario Home Products Corporation. Which case indicates the best financial position? Give the reasons for your answer by analyzing each case.

E17–4

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Case A Case B Case C Cash flows from operating activities Net income $120, 000 $ 12,000 $ 120,000 Amortization expense 44,000 44,000 44,000 Increase in current assets (4,000) (28,000) (76,000) Decrease in current liabilities (32,000) (24,000) 160,000 (4,000) 64,000 Cash flows from investing activities Acquisition of property, plant, and equipment $(364,000) $(364,000) $(364,000) Sales of property, plant, and equipment 16,000 16,000 388,000 (348,000) (348,000) 24,000 Cash flows from financing activities New borrowing 200,000 516,000 64,000 Payment of debt (36,000) (116,000) (84,000) 164,000 400,000 (20,000) Net increase (decrease) in cash $ (24,000) $ 48,000 $ 68,000