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    • Question

      Net profit for the year = ₹5,00,000

      Depreciation = ₹1,20,000 Increase in Inventory = ₹70,000 Increase in Creditors = ₹50,000 What is the Cash Flow from Operating Activities?
      A ₹5,50,000 Correct Answer Incorrect Answer
      B ₹5,00,000 Correct Answer Incorrect Answer
      C ₹6,40,000 Correct Answer Incorrect Answer
      D ₹6,00,000 Correct Answer Incorrect Answer
      E ₹6,60,000 Correct Answer Incorrect Answer

      Solution

      Start with Net Profit = ₹5,00,000 • Depreciation = ₹1,20,000 – Increase in Inventory = ₹70,000 • Increase in Creditors = ₹50,000 = ₹5,00,000 + ₹1,20,000 – ₹70,000 + ₹50,000 = ₹6,00,000

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