The Lakeside Inn had an operating cash flow of $48,450.Depreciation was $6,700 and interest paid...

The Lakeside Inn had an operating cash flow of $48,450. Depreciation was $6,700 and interest paid was $2,480. A net total of $2,620 was paid on long-term debt. The firm spent $24,000 on fixed assets and decreased net working capital by $1,330. What was the amount of the cash flow to stockholders?

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Expert Solution

Steps

1	Calculating the cash flow from assets:-	Operating Cash Flow - Net Capital spending - Change in net working Capital

		Operating Cash Flow		$ 48,450.00
		Net Capital Spending		$ 24,000.00
		Change in Net Working Capital	$ (1,330.00)

		Cash flow from Assets:-		$ 25,780.00


2	Calculating the cashflow to creditors:-	Interest paid + Amount paid on long term debt

		Interest Paid			$ 2,480.00
		Amount paid on long term debt	$ 2,620.00

		Cash Flow to creditors:-		$ 5,100.00


3	Calculating the cashflow to stock holders as follows:-	Cashflow from assets + cashflow to creditors

		Cash flow from Assets		$ 25,780.00
		Cash Flow to creditors		$ 5,100.00

		Cashflow to stockholders:-		$ 30,880.00

jeff jeffy answered 3 years ago

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