Answer:
$1,290,000
Explanation:
Given that,
Cash flow to creditors = -$85,000
Cash flow to stockholders = $170,000
Firm’s net capital spending for 2018 = $1,250,000
Firm reduced its net working capital investment by $45,000
Cash Flow from Assets:
= Cash Flow to Creditor + Cash Flow to Stockholders
= -$85,000 + $170,000
= $85,000
Cash Flow from Assets = OCF - Net Capital Spending - Change in Net Working Capital
$85,000 = OCF - $1,250,000 - (-$45,000)
OCF = $85,000 + $1,250,000 - $45,000
= $1,290,000
