Use the Tables for the Question(s)below

question 92

Multiple Choice

Use the tables for the question(s) below.
Pro Forma Income Statement for Ideko, 2013-2018
Pro Forma Assets & Liabilities for Ideko, 2013-2018

-Given the following data for a given period, compute the free cash flow to the firm. Net Income = $12 000
After-tax Interest Expense = $2 000
Depreciation = $1 000
Increase in NWC = $2 000
Capital Expenditures = $1 000

• A)$12 000
• B)$11 000
• C)$10 000
• D)$13 000

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Definitions:

Statement of Cash Flows

A financial statement that provides an aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Transactions and events that impact the net income of a business, primarily related to its core operations.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement, starting with net income and adjusting for non-cash transactions.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.