From the following information,calculate the cash flow from operating activities:
$$\begin{array} { l c }
\text { Net Income } & 80,000 \
\text { Depreciation } & 15,000 \
\text { Increase in accounts receivable } & 5,000 \
\text { Decrease in accounts payable } & 5,000 \
\text { Increase in inventory } & 5,000
\end{array}$$
A) £80,000 net cash inflow
B) £70,000 net cash inflow
C) £75,000 net cash inflow
D) £110,000 net cash inflow

Question

From the following information,calculate the cash flow from operating activities:
$$\begin{array} { l c } 
\text { Net Income } & 80,000 \
\text { Depreciation } & 15,000 \
\text { Increase in accounts receivable } & 5,000 \
\text { Decrease in accounts payable } & 5,000 \
\text { Increase in inventory } & 5,000
\end{array}$$
A) £80,000 net cash inflow
B) £70,000 net cash inflow
C) £75,000 net cash inflow
D) £110,000 net cash inflow

Quizplus · Accepted Answer

Since the question does not provide any details about the business activities, we cannot accurately determine the cash flow from operating activities. However, we can assume that the net cash inflow from operating activities would be the difference between the cash received from sales, services or other operating activities, and the cash paid for operating expenses such as salaries, rent, taxes, and other business expenses.

Out of the given answer choices, A) £80,000 net cash inflow seems like the most reasonable option as it is closer to the average of the other choices and seems like a viable net cash inflow from operating activities for most businesses.

From the Following Information,calculate the Cash Flow from Operating Activities