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Commerce · Q519

Financial Management

Graduate and Post Graduate · Commerce · question 519

Q519

Free cash flow is Rs 17000 and net investment in operating capital is Rs 10000 then net operating profit after taxes would be

A.
Rs 7,000.00
B.
Rs 27,000.00
Answer
C.
-Rs 27,000.00
D.
-Rs 7,000.00

Answer: Option B

Solution

Answer: Option B
Solution:
Net operating profit after tax = Free cash flow + Net investment in operating capital
= 17000 + 10000 = Rs. 27000.