Answer:
A. $69,855
B. $19,600
C. $5,700
D. $28,000
Explanation:
A. Calculation for the operating cash flow
Using this formula
Operating cash flow = EBIT + Depreciation
First step is to find the EBIT using this formula
EBIT = Sales – Cost – Other expenses - Depreciation
Let plug in the formula
EBIT = 255,000 -156,000 – 7,900 -15,600
EBIT = 75,500
Now let calculate the Operating cash flow using this formula
Operating cash flow = EBIT + Depreciation
Let plug in the formula
Operating cash flow = 75,500 + 15,600 -21,245
Operating cash flow =$69,855
B. Calculation for the 2015 cash flow to creditors
Using this formula
Cash flow to creditor = Redeemed long term debt + Interest
Let plug in the formula
Cash flow to creditor= 4,800 + 14,800
Cash flow to creditor= $19,600
C. Calculation for 2015 cash flow to stockholders
Using this formula
Cash flow to stockholders = Dividends – Issued equity
Let plug in the formula
Cash flow to stockholders= 12,000 – 6,300
Cash flow to stockholders=$5,700
D.If net fixed assets increased by the amount of $28,000 the addition to Net Working Capital will be the same amount of $28,000 reason been NET WORKING Capital has the following :Current assets – Current liability + Fixed asset which are all part of current asset.
