Jetson Spacecraft Corp. shows the following information on its 2009 income state

Question

Jetson Spacecraft Corp. shows the following information on its 2009 income statement: sales $201,000; costs $97,000; other expenses-$6,400, depreciation expense-$9,000; interest expense = $14,200; taxes $26,040; dividends $10,000. In addition, you're told that the firm issued $7,500 in new equity during 2009 and redeemed $9,100 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 to select) (c) What is the 2009 cash flow to stockholders? (Click to select (d) If net fixed assets increased by $23,000 during the year, what was the addition to NWC? (Click to select)

Explanation / Answer

a) OCF = Net Income + Depreciation

Net Income = Sales - Costs - Expenses - Depreciation - Interest - Taxes = 48,360

=> OCF = 48,360 + 9,000 = 57,360

b) Cash Flows to creditors = Interest + Repayment of debt

= 14,200 + 9,100

= 23,300

c) Cash flow to stockholders = Dividends - Equity raised

= 10,000 - 7,500

= 2,500

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