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    Question

    A company reports the following data for the year:

    • Net Profit before tax and extraordinary items: ₹12,00,000 • Depreciation: ₹2,00,000 • Loss on sale of machinery: ₹50,000 • Increase in Inventory: ₹3,00,000 • Increase in Trade Payables: ₹1,50,000 • Income Tax Paid: ₹2,00,000 Calculate Net Cash Flow from Operating Activities.
    A ₹10,00,000 Correct Answer Incorrect Answer
    B ₹9,00,000 Correct Answer Incorrect Answer
    C ₹8,00,000 Correct Answer Incorrect Answer
    D ₹7,50,000 Correct Answer Incorrect Answer
    E ₹11,00,000 Correct Answer Incorrect Answer

    Solution

    Net Profit before Tax = ₹12,00,000 Add: Depreciation = ₹2,00,000 Add: Loss on sale = ₹50,000 Less: Increase in Inventory = ₹3,00,000 Add: Increase in Payables = ₹1,50,000 Less: Income Tax Paid = ₹2,00,000 Net Cash from Operating = 12 + 2 + 0.5 – 3 + 1.5 – 2 = ₹11,00,000

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