Ship-to-Shore had a net income of $280,000 last year. Its expenses included depreciation of $55,000 and interest of $40,000. It sold new stock for which it received $20,000. The company also purchased a new commercial fishing boat for $40,000. What is Ship-to-Shore's net cash flow for last year?
A)$395,000
B)$355,000
C)$315,000
D)$280,000

Question

Quizplus · Accepted Answer

Net cash flow is calculated by adding back non-cash expenses (depreciation) to net income and adjusting for cash inflows and outflows from financing and investing activities. Here, net cash flow = $280,000 (net income) + $55,000 (depreciation) + $20,000 (stock sale) - $40,000 (boat purchase) = $315,000.

Ship-To-Shore Had a Net Income of $280,000 Last Year