Question

Calculate Net New Borrowing using the following information: Dividends Paid 53,000 Net Capital Spending 22,000 Net New Equity Issued 29,000 Change in NWC 21,000 Operating Cash Flow 117,000 Interest Paid 60,000

Answer 1

Net New Borrowing is 10,000

Step-by-step explanation:

Cash available for capital spending = Operating cash flow - Interest Paid - Dividends Paid - Change in Net Working Capital + New Equity Issued

= 117,000 - 60,000 - 53,000 - 21,000 + 29,000

= 12,000

Net new borrowing = Net Capital Spending - Cash available for capital spending

= 22,000 - 12,000 = 10,000