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Given the cash flow statement for the year ended December 31, 2023: Operating Activities: Net Income: $1,600,000 Depreciation Expense: $380,000 Increase in Accounts Receivable: $90,000
Given the cash flow statement for the year ended December 31, 2023:
Operating Activities:
- Net Income: $1,600,000
- Depreciation Expense: $380,000
- Increase in Accounts Receivable: $90,000
- Decrease in Inventory: ($50,000)
- Increase in Accounts Payable: $60,000
- Interest Expense Paid: ($130,000)
- Income Tax Paid: ($320,000)
- Net Cash Provided by Operating Activities: $1,830,000
Investing Activities:
- Purchase of Equipment: ($550,000)
- Proceeds from Sale of Investments: $120,000
- Net Cash Used in Investing Activities: ($430,000)
Financing Activities:
- Proceeds from Issuance of Long-term Debt: $900,000
- Repayment of Short-term Borrowings: ($150,000)
- Payment of Cash Dividends: ($280,000)
- Net Cash Provided by Financing Activities: $470,000
a. Calculate the Cash Flow from Operations using the indirect method. b. Determine the Net Cash Used in Investing Activities and explain its implications for the company’s investment in assets. c. Analyze the Financing Activities section and discuss its impact on the company’s capital structure and financial flexibility.
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