Jetson Spacecraft Corp shows the following information on its 2009 income statem

Question

Jetson Spacecraft Corp shows the following information on its 2009 income statement sales $199,000 costs $89,000; other expenses $5,500, depreciation expense 8,900; interest expense $13,800 taxes $28,630, dividends-$9,900. In addition, you're told that the firm issued $7,300 in new equity during 2009 and redeemed $8,900 in outstanding long-term debt (a) What is the 2009 operating cash flow? (Click to select) (b) What is the 2009 cash flow to creditors? (Click toselect (c) What is the 2009 cash Blow to stockholders? Click to select) (d) f net fixed assets increased by $19,000 during the year, what was the addition to NWC? (Click to select) Ask me anything 17 E ®.orga ..' 2 3 5 6 8 9

Explanation / Answer

To find the OCF, we first calculate net income. Income Statement Sales 199000 Costs 89000 other Expenses 5500 Depriciation 8900 EBIT 95600 Interest 13800 Taxable Income 81800 Taxes 28630 Net Income 53170 Dividends 9900 Additions to RE 43270 A operating cash flow EBIT + Depreciation – Taxes 75870 B cash flow to creditors (13800-(-8900)) Interest – Net new LTD 22700 C cash flow to stockholders Dividends – Net new equity 2600 D CFA = CFC + CFS 22700+2600 25300 CFA is also equal to OCF – Net capital spending – Change in NWC Net capital spending = Increase in NFA + Depreciation 19000+8900 27900 Now, CFA = OCF – Net capital spending – Change in NWC 25300 = 75870 - 27900 - change in NWC Change in NWC = -( 25300-75870+27900) 22670

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