$\begin{array}{lr}
\text { Net income } & \$ 200 \
\text { Depreciation } & 55 \
\text { Issuance of new stock } & 15 \
\text { Repurchase of debt } & 10 \
\text { Sale of property } & 20 \
\text { Purchase of equipment } & 65 \
\text { Dividend payments } & 35 \
\text { Interest payments } & 50
\end{array}$
-What is the net cash flow?

Question

$\begin{array}{lr}
\text { Net income } & \$ 200 \
\text { Depreciation } & 55 \
\text { Issuance of new stock } & 15 \
\text { Repurchase of debt } & 10 \
\text { Sale of property } & 20 \
\text { Purchase of equipment } & 65 \
\text { Dividend payments } & 35 \
\text { Interest payments } & 50
\end{array}$ 
-What is the net cash flow?

Quizplus · Accepted Answer

Net cash flow can be calculated by adding up all cash inflows and subtracting all cash outflows. 
Net cash flow = (Issuance of new stock + Sale of property) - (Repurchase of debt + Purchase of equipment + Dividend payments + Interest payments) 
Net cash flow = (15 + 20) - (10 + 65 + 35 + 50) 
Net cash flow = 30 - 160 
Net cash flow = -130 
Since the net cash flow is negative, the company is spending more cash than it is bringing in. Therefore, none of the choices are good as the company needs to find a way to increase its cash inflows or decrease its cash outflows.

-What Is the Net Cash Flow? A) $185 B) $210

-What Is the Net Cash Flow?
A) $185
B) $210