Answer: $589,500
Explanation:
The cash flow to the creditors in 2016 will be calculated as:
= $94,500 – ($1,590,000 - $1,405,000)
= $94,500 – $1,590,000 + $1,405,000
= -$90,500
For the shareholders, the cash flow in 2016 will be:
= $146,000 – [($151,000 + $2,960,000) – ($141,000 + $2,660,000)]
= -$164,000
Capital spending = $970,000
Cash flow due to the net working capital investment = -$126,000
OCF
= -$90,500 + (-$164,000) + $970,000 + (-$126,000)
= $589,500
