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Solnce55 [7]
3 years ago
6

During the past year, a company had cash flow to stockholders, an operating cash flow, and net capital spending of $16,497, $40,

016, and $18,820, respectively. The net working capital at the beginning of the year was $7,083 and it was $8,930 at the end of the year. What was the company's cash flow to creditors during the year?
Business
1 answer:
saul85 [17]3 years ago
6 0

Answer:

The correct answer would be $2,852.

Explanation:

The equation here to understand is:

Ending net working capital = Opening net working capital - Cash flow to Stockholders + operating cash flow - net capital spending - cash flow to creditors.

$8,930 = $7,083 - $16,497 + $40,016 - $18,820 - X.

X = 2,852.

For calculating ending working capital we need to keep in mind that all cash inflows are added in opening working capital and all cash outflows are subtracted.

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A joint stock company was named that way because stocks of the company were sold to rich people in England that were willing to risk money in the colonies. E.g. Jameston was founded and basically owned by the Virginia Company. Joint stock companies were vital for the colonization processes of the British Empire.

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