Question

Rowdy's Restaurants Cash Flow ($ in millions) Cash received from: Customers $ 1,800 Interest on investments 200 Sale of land 100 Sale of Rowdy's common stock 600 Issuance of debt securities 2,000 Cash paid for: Interest on debt $ 300 Income tax 80 Debt principal reduction 1,500 Purchase of equipment 4,000 Purchase of inventory 1,000 Dividends on common stock 200 Operating expenses 500 Rowdy's would report net cash inflows (outflows) from operating activities in the amount of:

Answer 1

Net cash flow from operating activities $120

Step-by-step explanation:

Cash flows from operating activities

Cash collections:

• Cash collected from customers $1,800
• Cash from interest revenue $200 $2,000

Cash payments:

• Operating expenses ($500)
• Inventory ($1,000)
• Interest on debt ($300)
• Income tax ($80) ($1,880)

Net cash flow from operating activities $120