Hopewell Corporation had Net Income for 2017 of 7300000 The

Hopewell Corporation had Net Income for 2017 of $7,300,000. The firm invested $3,000,000 in manufacturing equipment during 2017. The equipment is being depreciated over five years using straight-line depreciation, starting in 2017. Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2017 with amounts in thousands. What is the Net Cash Flow in 2017? Please specify your answer in the same units as the statement of cash flows

Solution

Hopewell Incorporation Statement of Cash flow For the Year 2017 (amounts in thousands) Cash flow from operating Activities: Net Income $             7,300 Depreciation Expense $ 600 Net Cash provided by operating activities $             7,900 Cash flow from Investing activities: Investment in Equipment $           -3,000 Net Cash used in Investing activities $           -3,000 Net Cash flow for the year $             4,900 Working: Depreciation under Straight Line method = (Cost - Salvage Value)/Useful Life = (3000000-0)/5 = $       6,00,000