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Commerce · Q521

Financial Management

Graduate and Post Graduate · Commerce · question 521

Q521

Free cash flow is Rs 15000 and net investment in operating capital is Rs 9000 then net operating profit after taxes will be

A.
Rs 24,000.00
Answer
B.
Rs 6,000.00
C.
-Rs 6,000.00
D.
-Rs 24,000.00

Answer: Option A

Solution

Answer: Option A
Solution:
Net operating profit after tax = Free cash flow + Net investment in operating capital
= 15000 + 9000 = Rs. 24000.