Schwert corp. shows the following information on its 2019 income statement: sales = $235,000; costs = $147,000; other expenses = $7,900; depreciation expense = $17,500; interest expense = $13,500; taxes = $17,185; dividends = $10,500. in addition, you’re told that the firm issued $5,000 in new equity during 2019 and redeemed $3,500 in outstanding long-term debt. (do not round intermediate calculations.) a. what is the 2019 operating cash flow? b. what is the 2019 cash flow to creditors? c. what is the 2019 cash flow to stockholders? d. if net fixed assets increased by $20,000 during the year, what was the addition to net working capital (nwc)?

a. $62,915

b. $17,000

c. $5,500

d. $2,915

Explanation:

a. The operating cash flow is shown below:

= EBIT + Depreciation - Income tax expense

where,  

EBIT = Sales - cost of good sold - other expenses - depreciation expense  

=  $235,000 - $147,000 - $7,900 - $17,500

= $62,600

And all other items would remain same

Now put these values to the above formula  

So, the value would equal to

= $62,600 + $17,500 - $17,185

= $62,915

b. The computation of the cash flow to creditors is shown below:

= Interest expense - ending balance of long term debt + beginning balance of long term debt  

= $13,500 - (-$3,500)

= $17,000

c. The computation of the cash flow to stockholder is shown below:

= Dividend expense - new equity

= $10,500 - $5,000

= $5,500

d. Computation of the addition to the net working capital is shown below:

The computation of the cash flow from assets = cash flow to creditors + cash flow to stockholders

= $17,000 + $5,500

= $22,500

Now addition to NWC = Operating cash flow - cash flow from assets - net capital spending

= $62,915 - $22,500 - ($20,000 + $17,500)

= $2,915

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.

the first one $24,630