Question

Hopewell Corporation had Net Income for 2019 of $7,300,000.

The firm invested $3,000,000 in manufacturing equipment during 2019.
The equipment is being depreciated over five years using straight-line depreciation, starting in 2019.

Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2019 with amounts in thousands.

What is the Net Cash Flow in 2019?

Note: Financial results are provided in dollars but the income statement units are thousands of dollars.

Please specify your answer in the same units as the statement of cash flows (i.e., enter the number from your completed statement of cash flows).

Answer 1

	Statement of Cashflow
	2019	(Fig in '000)
Cash flow from operating Activities:
Net income	7300
Add:- Depreciation expense	600
Net Cash provided by operating activities	7900
Cash flow from investing activities:
Investment in Equipment	-3000
Net cash used in investing activities	-3000
Net Cash flow in 2019	4900
Working:-
Depreciation under the Straight Line method	=	(Cost - Salvage Value)/Useful Life
	=	3000000/5
	=	600000

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