Calculate firm cash flow from operating activities

Assignment Help Finance Basics
Reference no: EM132807102

Company ABC shows the following information on its 2020 income statement: Statement of Comprehensive Income

Sales $200,000

Costs $110,000

Depreciation $9,000

Interest $14,000

a. The company's tax rate is 40%. If net working capital decreased by $20,000 during the year, calculate firm's cash flow from operating activities.

b. In addition, you are told that the company's cash flow to bondholders and cash flow to shareholders were $9,000 and $4,200, respectively. During 2020, the net capital spending was $40,000. What was the increase or decrease in cash during 2020? Hint: You have two formulas for cash flow from asset (CFFA).

Reference no: EM132807102

Questions Cloud

What entry will norwood corp make upon receiving the note : What entry will Norwood Corp. make upon receiving the note? Norwood Corp. receives a $7,000, 6-month, 4% note from Zest Corp.
Explain importance of phonological and phonemic awareness : Select a grade level Pre-K to 3rd grade as well as a state standard and explain the importance of phonological and phonemic awareness.
Introduce sport utility vehicle : Roger is a director of a major car manufacturer. This is one of the few remaining car companies yet to introduce a sport utility vehicle
How each philosophy aligns with naeyc standards : Philosophies of education are important for teachers to understand, as these philosophies will guide a teacher's educational beliefs, practices, and decisions.
Calculate firm cash flow from operating activities : Company ABC shows the following information on its 2020 income statement: Statement of Comprehensive Income
Overview of the vaccination policy : Provide an overview of the vaccination policy. How is this policy enforced within your state?
What is the carrying amount after the write off : Accounts Receivable is $19,000 before the write off of a $2,500 uncollectible accounts receivable. What is the carrying amount after the write off?
Is the given approach helpful to our health delivery system : In the United States, our approach to policy development and revision is to use small steps, otherwise known as incremental change. Is this approach helpful.
What is winston market-book ratio : 1) The EPS of a company is $12.95. It has cash flow per share of $7.56. Its price to cash flow ratio is 12.0. What is this company's price to earnings ratio?

Reviews

Write a Review

Finance Basics Questions & Answers

  The primary objective of business organizations

The primary objective of business organizations is to maximize shareholder value. What is "shareholder value" and how is it measured? Do you think that maximizing shareholder value is a manageable process?

  Years and interest is paid semiannually

ABC Co. has a bond outstanding that has a 6% coupon rate on a $1,000 par and a market price of $958.42. If the bond matures in 5 years and interest is paid.

  Benefits and drawbacks of an autocratic management style

Critically discuss the benefits and drawbacks of an autocratic management style.

  What is the equivalent nominal interest rate

What is the equivalent nominal interest rate if the loan has quarterly payments and has the same effective rate?

  Why does it provide a relatively poor hedge

Explain how a stop-loss trading rule can be implemented for the writer of an out-of-themoney call option. - Why does it provide a relatively poor hedge?

  Investor buys a european put on a share

An investor buys a European put on a share for $3. The stock price is currently $42 and the strike price is $40. When does the investor make a profit?

  What is moore law

1. What is Moore's Law? What does it apply to?

  Foreign exchange loss incurred on the? transaction

Siam? Cement, the? Bangkok-based cement? manufacturer, suffered enormous losses with the coming of the Asian crisis in 1997. The company

  What does this mean if you are a potential seller

You read that European call options on pounds sterling having a strike of £/$: 1.31 and a maturity of next March are now quoted at 5.88c.

  Current estimate of the volatility

Suppose that the current estimate of the volatility is 1.6% per day and the most recent percentage change in the market variable is 1%.What is the new variance estimate?

  Compute sarah''s monthly mortgage payments

If Sarah Jean wants to pay off her mortgage today, for how much should she write a check? She made her most recent mortgage payment earlier today.

  What is the subscription price

Before the rights offer, the company has two million shares outstanding. If the rights were each priced at $10, what is the subscription price?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd