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

question 87

Multiple Choice

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

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Definitions:

Net Present Value

The difference between the current value of cash inflows and the current value of cash outflows over a period of time; used to evaluate the profitability of an investment.

Internal Rate of Return

The interest rate that brings the net present value of all incoming and outgoing cash flows from an investment or project to a neutral point of zero.

Excel Spreadsheets

A software program used for data organization, analysis, and storage in tabular form.

Profitability Index

A financial tool used to evaluate the attractiveness of an investment, calculated as the present value of future cash flows divided by the initial investment.