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AduMaggu3944
10.09.2020 •
Business
Precision Manufacturing had the following operating results for 2014: sales = $38,900; cost of goods sold = $24,600; depreciation expense = $1,700; interest expense = $1,400; dividends paid = $1,000. At the beginning of the year, net fixed assets were $14,300, current assets were $8,700, and current liabilities were $6,600. At the end of the year, net fixed assets were $13,900, current assets were $9,200, and current liabilities were $7,400. The tax rate for 2014 was 34 percent. What is the cash flow from assets for 2014?
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Ответ:
$4,284
Explanation:
The Computation of the cash flow from assets for the year 2014 is shown below
= Operating cash flow - net capital spending - changes in working capital
where,
Operating cash flow is
= EBIT + depreciation - taxes
The EBIT could come from
= Sales - cost of goods sold - depreciation expense - interest expense - tax expense
= $38,900 - $24,600 - $1,700 - $1,400 - $34% of $11,200
= $7,392
Now operating cash flow is
= $7,392 + $1,700 - $3,808
= $5,284
net capital spending = ending fixed assets - beginning fixed assets + depreciation
= $13,900 - $14,300 + $1,700
= $1,300
Changes in working capital = (ending balance of current assets - ending balance of current liabilities) - (beginning balance of current assets - beginning balance of current liabilities)
= ($9,200 - $7,400) - ($8,700 - $6,600)
= $1,800 - $2,100
= -$300
Now the cash flow from assets is
= $5,284 - $1,300 -(-$300)
= $4,284
Ответ:
A
Explanation: