What Is the Operating Cash Flow, Given the Following Information

question 14

Multiple Choice

What is the operating cash flow, given the following information? $$\begin{array} { | l r | } \hline \text { Net income } & \$ 600 \\\text { Depreciation } & 70 \\\text { Issuance of new stock } & 30 \\\text { Repayment of debt } & 20 \\\text { Sale of old equipment } & 40 \\\text { Purchase of new equipment } & 60 \\\text { Dividend payments } & 70 \\\text { Interest Payments } & 100 \\\hline\end{array}$$

• A) $400
• B) $470
• C) $530
• D) $540
• E) $670

Understand the concept and classification of cash flows in operating, investing, and financing activities.

Analyze and interpret the effects of specific transactions on the statement of cash flows.

Differentiate between the indirect and direct methods of reporting cash flows.

Identify the impacts of changes in balance sheet accounts on cash flow.

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Definitions:

Calcium Carbonate

A chemical compound with the formula CaCO3, commonly found in rocks as the minerals calcite and aragonite and is the main component of pearls and the shells of marine organisms.

Clay

1. Any fine-grained sedimentary particle that is finer than 1/256 mm. 2. A family of finely crystalline, hydrous-silicate minerals with a two- or three-layered crystal structure.

Calcium Carbonate

A chemical compound found in rocks as the minerals calcite and aragonite, and is the primary component of shells of marine organisms, snails, and eggs.

O-Horizon

The uppermost layer of soil, primarily composed of organic matter, including decomposed leaves, twigs, and other plant material.