Precise Machining has cash flow from assets of $1,670,000, operating cash flow of $2,340,000, net capital expenditures of $750,000, and paid dividends of $45,000. Net working capital: A. decreased by $80,000. B. increased by $80,000. C. increased by $125,000.

Precise Machining has cash flow from assets of $1,670,000, operating cash flow of $2,340,000, net capital expenditures of $750,000, and paid dividends of $45,000. Net working capital: A. decreased by $80,000. B. increased by $80,000. C. increased by $125,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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Precise Machining has cash flow from assets of $1,670,000, operating cash flow of $2,340,000, net capital expenditures of $750,000, and paid dividends of $45,000. Net working capital:

	A.	decreased by $80,000.
	B.	increased by $80,000.
	C.	increased by $125,000.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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