What is the cash flow to creditors for 2015? $1,230 $8,025 $9,135 ?$5,565 ?$2,70
ID: 2618267 • Letter: W
Question
What is the cash flow to creditors for 2015?
$1,230
$8,025
$9,135
?$5,565
?$2,705
What is the cash flow to stockholders for 2015?
$1,200
–$2,800
$1,520
–$1,600
$2,800
$1,230
$8,025
$9,135
?$5,565
?$2,705
New Town Industries Tax rate 35% Revenues Cost of goods sold Interest Dividends $42,629 $37,911 23,704 24,832 1,230 1,584 Administrative expenses Cash Inventory Accounts payable Long-term debt Accounts receivable Common stock Net fioxed assets 2,609 2,814 7,040 6,820 3,671 2,989 3,988 4,503 2,325 3,760 19,105 25,900 4,1 318 22,600 19,800 41,280 42,110Explanation / Answer
Solution: 1. Answer is 2nd option $8,025 Working Notes: Cash flow to creditors = Interest paid - Net new borrowing Cash flow to creditors = Interest paid 2015 - (LTD 2015 - LTD 2014 ) Cash flow to creditors = $1,230 - (19,105 - 25,900 ) Cash flow to creditors = $1,230 - (-6,795 ) Cash flow to creditors = $1,230 + 6,795 Cash flow to creditors = $8,025 Notes: Cash flow to creditors is the net cash outflows towards creditors in 2015 is $8,025 2. Answer is 4th option -$1,600 Working Notes: Cash flow to stockholders = Dividends paid - Net new equity Cash flow to stockholders = Dividends paid 2015 - (Common 2015 - Common 2014) Cash flow to stockholders = $1,200 - (22,600 - 19,800) Cash flow to stockholders = $1,200 - 2,800 Cash flow to stockholders = -$1,600 Cash flow to stockholders is net cash flow towards stockholders is in our case of 2015 it is negative means , net cash inflow from stockholders by $1,600 Please feel free to ask if anything about above solution in comment section of the question.
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