What is the operating cash flow, given the following information?
$\begin{array}{lrr}
\text {Net income } &\$740\
\text { Depreciation} &\$40\
\text {Issuance of new stock } &\$20\
\text { Repayment of dept } &\$35\
\text {Sale of old equipment } &\$40\
\text { Purchase of new equipment} &\$60\
\text { Dividend payments } &\$65\
\text { Interest payments} &\$80\
\end{array}$

A)$680
B)$650
C)$780
D)$890
E)$930

Question

What is the operating cash flow, given the following information?
$\begin{array}{lrr}
  \text {Net income  } &\$740\
 \text {  Depreciation} &\$40\
 \text {Issuance of new stock  } &\$20\
 \text { Repayment of dept } &\$35\
 \text {Sale of old equipment  } &\$40\
 \text {  Purchase of new equipment} &\$60\
 \text { Dividend payments } &\$65\
 \text {  Interest payments} &\$80\
\end{array}$

A)$680
B)$650
C)$780
D)$890
E)$930

Quizplus · Accepted Answer

The operating cash flow is calculated by taking the net income and adjusting it for non-cash expenses like depreciation and changes in working capital. Using the information provided in the chart, we can calculate the operating cash flow as follows:

Operating cash flow = Net income + Depreciation - Increase in accounts receivable - Increase in inventory + Increase in accounts payable
Operating cash flow = 850 + 110 - 120 - 40 + 90
Operating cash flow = 890

Therefore, the correct answer is C, $780.

What Is the Operating Cash Flow, Given the Following Information