Purchase Solution

Working Capital and Cash Flows

Not what you're looking for?

Ask Custom Question

A firm's balance sheets for year-end 2003 and 2004 contain the following data. What happened to investment in net working capital during 2004? All times are in millions of dollars.

Dec. 31, 2003 Dec. 31, 2004
Accounts receivable 32 36
Inventories 25 30
Accounts Payable 12 26

Purchase this Solution
Solution Summary

The solution shows the formula and calculation to complete the answer to the question.

Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Motivation

This tests some key elements of major motivation theories.

View More Free Quizzes
Related BrainMass Solutions

  • Relevant Cash Flows

    305174 Should Caledonia focus on cash flows or accounting profits in making our capital-budgeting decisions? Should we be interested in incremental cash flows, incremental profits, total free cash flows, or total profits?

  • Calculating cash flows, after-tax salvage value, NPV and IRR

    Estimate the required net operating working capital for each year, and the cash flow due to investments in net operating working capital.

  • Finance problem

    We need to add back non-cash expense, that is the depreciation expense and net working capital to the incremental net income in order to get the incremental cash flows of the investment.

  • Restrictions and budgetary concerns for capital projects

    (Resources, 2010) One should estimate following: 1) Cash flows in the beginning of the project in terms of Initial investment, Working capital & Preliminary expenses 2) Annual Operating cash flows in terms of cash revenues, adjustment of working

  • Investments - Net Income/Cash Flow

    flows= 4,150 4,150 4,150 4,150 Investments -10000 Working Capital -200 -50 -50 100 200 Incremental cash flows= -10200 4,100 4100 4250 4350 Cost of Capital 12% NPV= $2,518.78 NPV has been found out by excel function and its positive

  • Cash Flows vs. Accounting Profits for Capital-Budgeting Focus

    Finally, all working capital is liquidated at the termination of the project at the end of year 5. The depreciation method - a. Should Caledonia focus on cash flows or accounting profits in making its capital-budgeting decisions?

  • Internal Rate of Return on a Project

    flows 4 $14,515 Annual operating cash flows 5 $14,515 Annual operating cash flows 6 $14,515 Annual operating cash flows + Recovery of net working capital 7 $16,515 IRR = 7.53% This solution helps find the internal rate of return

  • Free-Cash Flow


    Increases in working capital drain a firm's cash flows, while decreases in working capital increase the cash flows available to equity investors.

  • Net Working Capital and Operating Cash Flow

    On the other hand, investing cash flows are funds spent or received from investments made by the firm. Therefore the operating cash flows, for 2010, is $160,000. The net working capitals and operating cash flows are given.

  • Projection Evaluation 21

    The IRR is 7.5% The solution explains how the calculate the cash flows of a project and then the calculation of NPV and IRR.

View More Related Solutions