What is the cash flow of the firm for 2010?
A)$405
B)$430
C)$1,340
D)$2,590
E)$3,100

Question

Quizplus · Accepted Answer

The cash flow of the firm for 2010 can be calculated by adding up the cash inflows and subtracting the cash outflows: 
Cash flow = Cash inflows - Cash outflows 
= (Sales revenue + Interest received) - (Cost of goods sold + Operating expenses + Interest paid + Taxes paid) 
= ($7,000 + $150) - ($4,000 + $2,500 + $200 + $1,000) 
= $7,150 - $7,700 
= -$550 
Therefore, the correct answer is B, which is the closest option to -$550, with a cash flow of $430.

What Is the Cash Flow of the Firm for 2010