Question

Depreciation= $700 Increase in accounts receivable= $200 Increase in accounts payable= $200 Increase in inventories= $300...

Depreciation= $700

Increase in accounts receivable= $200

Increase in accounts payable= $200

Increase in inventories= $300

Net income= $500

- What is the cash flow?

A) 1400

B) 900

C) 500

D) 1900

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Answer #1

Answer-

Net Income $500
Add: Depreciation $700
Operating profit before working capital changes $1,200
Add: Increase in accounts payable $200
$1,400
Less: Increase in accounts receivable $200
Less: Increase in inventories $300
Cash Flow from Operating Activities 900

So,The correct option is B)-$900

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