Question

What is the operating cash flow, given the following information? $ 740 Net income Depreciation Issuance of new stock Repayment of dept Sale of old equipment Purchase of new equipment Dividend payments Interest payments EA A A A A A $780 $890 $930 $680 $650 QUESTION 3 The management of the Downtown Athletics recently voted to limit any future borrowing or sales of company stock. By taking this action, management has effectively done which one of the following? increased the profit margin limited future growth c maximized future dividends lowered income taxes c maximized future retained earnings QUESTION 4 For the year, Wilson Manufacturing, Inc. increased its current assets by $62,000, decreased its current liabilities by $55,000, and decreased its fixed assets by $19,000. What is the investment cash flow for the year? $31,000 $48,000 $31,000 $19,000 $12,000 QUESTION 5 A decrease in which one of the following will increase the return on assets? inventory long-term debt dividends paid retained earnings sales QUESTION 6 Which one of the following will increase the investment cash flow? purchase of an investment crepaying a bond issue payment of interest on a bond issue sale of a building issuing new shares of stock

Answer 1

Compute the operating cash flows (OCF), using the equation as shown below:

OCF = Net income + Depreciation

         = $740 + $40

         = $780

Hence, the OCF is $780.

Note:

The payment of interest expenses is considered as an operating activity.