Question

Valley Technology had Net Income for 2021 of $9,600,000. The firm invested $5,000,000 in manufacturing equipment during 2020 but made no additional capital investments in 2021. The equipment is being depreciated over five years using straight-line depreciation, starting in 2020. Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2021 with amounts in thousands. What is the Net Cash Flow in 2021

Answer 1

If Valley Technology had Net Income for 2021 of $9,600,000. The Net Cash Flow in 2021 is:$5,600,000.

Net cash flow

Cash Flow from Operating Activities

Valley Technology Statement of Cash Flows For the year ended 2021

Cash Flow from Operating Activities:  

Net Income $9,600,000

Add Depreciation Expense $1,000,000

($5,000,000/5)

Net Cash provided (used) by operating activities:  $10,600,000

Cash Flow from Investing Activities:  

Purchase of manufacturing equipment -$5,000,000  

Net Cash provided (used) in Investing activities -$5,000,000

Cash Flow from Financing Activities:$0

Net cash flow in 2021 $5,600,000

Therefore  If Valley Technology had Net Income for 2021 of $9,600,000. The Net Cash Flow in 2021 is:$5,600,000

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