Answer: $1,311,000
Explanation:
Operating Cashflow = Cashflow from Assets + Capital spending + changes in Net working capital
Cashflow from Assets = Cashflow to Creditors + Cashflow to Stakeholders
Cashflow to Creditors = Interest paid - Change in long term debt
= 140,000 - (2,950,000 - 2,700,000)
= -$110,000
Cashflow to Stakeholders
= Dividends paid - New equity issue
= 500,000 - ((500,000 + 3,500,000) - (460,000 + 3,200,000))
= $160,000
Cashflow from Assets = -110,000 + 160,000
= $50,000
Operating cashflow = 50,000 + 1,320,000 + (-59,000)
= $1,311,000
