The 2017 balance sheet of Kerber's Tennis Shop, Incorporated, showed $3 million in long-term debt, $760,000 in the common stock account, and $6.5 million in the additional paid-in surplus account. The 2018 balance sheet showed $4 million, $925,000, and $7.8 million in the spme three accounts, respectively. The 2018 income statement showed an interest expense of $370,000. The company paid out $690,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $810,000, and the firm reduced its net working capital investment by $165,000, what was the firm's 2018 operating cash flow, or OCF?
The 2017 balance sheet of Kerber's Tennis Shop, Incorporated, showed $3 million in long-term debt, $760,000 in the common stock account, and $6.5 million in the additional paid-in surplus account. The 2018 balance sheet showed $4 million, $925,000, and $7.8 million in the spme three accounts, respectively. The 2018 income statement showed an interest expense of $370,000. The company paid out $690,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $810,000, and the firm reduced its net working capital investment by $165,000, what was the firm's 2018 operating cash flow, or OCF?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Am. 333.
Transcribed Image Text:The 2017 balance sheet of Kerber's Tennis Shop, Incorporated, showed $3 million in
long-term debt, $760,000 in the common stock account, and $6.5 million in the
additional paid-in surplus account. The 2018 balance sheet showed $4 million,
$925,000, and $7.8 million in the same three accounts, respectively. The 2018 income
statement showed an interest expense of $370,000. The company paid out $690,000 in
cash dividends during 2018. If the firm's net capital spending for 2018 was $810,000, and
the firm reduced its net working capital investment by $165,000, what was the firm's
2018 operating cash flow, or OCF?
Multiple Choice
$-3,430,000
O $-1,405,000
O $1,735,000
O
$-760,000
$-2,140,000
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