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Answer (A) is correct . The relevant calculations are as follows: ? Proceeds from sale of plant building $1,200,000 Payment for purchase of machinery (500,000) ???Net cash provided by investing activities $???700,000 Proceeds from issuance of preferred stock $4,000,000 Dividends paid on preferred stock (400,000) ???Net cash provided by financing activities $3,600,000

Answer (B) is incorrect because The stock dividend has no effect on cash flows from financing activities.
Answer (C) is incorrect because The gain on the sale of the building is double counted in determining the net cash flow from investing activities.
Answer (D) is incorrect because The gain on the sale of the building is double counted in determining the net cash flow from investing activities.