Consider the following financial information and answer the questions that follow: Sales : $250,000 Costs : $134,000 Depreciation : $10,200 Operating expenses : $6,000 Interest expenses : $20,700 Taxes : $18,420 Dividends : $10,600 Addition to Retained Earnings : $50,080 Long term debt repaid : $9,300 New Equity issued : $8,470 New fixed assets acquired : $15,000You are required to: i) Calculate the operating cash flow ii) Calculate the cash flow to creditors iii) Calculate the cash flow to shareholders iv) Calculate the cash flow from assets v) Calculate net capital spending vi) Calculate change in NWC Show all computations
Consider the following financial information and answer the questions that follow: Sales : $250,000 Costs : $134,000
i) Calculate the operating cash flow
ii) Calculate the cash flow to creditors
iii) Calculate the cash flow to shareholders
iv) Calculate the cash flow from assets
v) Calculate net capital spending
vi) Calculate change in NWC
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this was my answer for question 3:
- CFC = Interest paid – Net New Long-Term Debt
Net New Long-Term Debt= Long Term Debt – Long term Debt repaid
NNLTD= $0 - $9,300
NNLTD= -$9,300
Then, CFC = $20,700 – (-$9,300)
CFC= $20,700 + $9300
CFC= $30,000
Can you explain why the new long term debt issued was considered in your calculation?
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