Tag: merits and demerits of cash flow statement

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Multiple choice commercial studies budgeting meaning and objectives of cash flow statement statement of changes in financial position meaning merits and demerits of cash flow statement

Free cash flow is Rs 17000 and net investment in operating capital is Rs 10000 then net operating profit after taxes would be __________.

  1. Rs 7, 000.00

  2. Rs 27, 000.00

  3. Rs - 27, 000.00

  4. Rs - 7, 000.00
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Free Cash Flow (FCF) = NOPAT - Net Investment. Given FCF = 17000 and Net Investment = 10000, then 17000 = NOPAT - 10000. Therefore, NOPAT = 17000 + 10000 = 27000.