Jackson Company Gathered the Following Data to Prepare Its 20X7

question 23

Multiple Choice

Jackson Company gathered the following data to prepare its 20X7 statement of cash flows: $$\begin{array} { | l | r | } \hline \text { Profit } & \$ 40,000 \\\hline \text { Depreciation expense } & 5,000 \\\hline \text { Trade receivables decrease } & 3,000 \\\hline \text { Wages payable increase } & 4,000 \\\hline \text { Amortization of patent } & 1,000 \\\hline \text { Income tax payable decrease } & 2,000 \\\hline\end{array}$$ Based only on the above data, the net cash inflow from operating activities during 20X7 was which of the following?

• A) $43,000.
• B) $45,000.
• C) $51,000.
• D) $53,000.

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Definitions:

Average Rate of Return

A financial metric used to calculate the average annual return on an investment or project over its lifetime.

Total Income

The sum of all earnings or revenues generated by an individual or entity within a specific period.

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Net Present Value

A financial metric that calculates the value of a series of cash flows by discounting them to the present date, used to assess the profitability of investments.