The Cloud Corporation provided the following current information: Earnings before interest and taxes ...............$40,000 Interest expense ..................................................2,000

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The Cloud Corporation provided the following current information: 

Earnings before interest and taxes ...............$40,000
Interest expense ..................................................2,000
Depreciation ......................................................10,000
Current taxes ......................................................6,000
Deferred taxes ....................................................4,000
Repayment of long-term debt ..........................8,600
Proceeds from the sale of common shares ....4,000
Purchases of long-term assets .......................21,000
Purchases of inventories ...................................1,900
Payment of dividends ......................................14,500


Determine the cash flows from the firm and the cash flows to investors of the firm. Does the cash flow identity hold?

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Corporate Finance

ISBN: 9781259270116

8th Canadian Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss

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