Chapter 10, Problem 6PROB

Summary Introduction

Supplemental operating cash flows: Supplemental operating cash flows is also called as cash flow from operations. This are cash flows which are generated from the companies operating activities.

Calculate the supplemental operating cash flows by using the following formula:

$\text{Supplemental operating cash flows}=\text{Net income}+\text{Depreciation}$

CC is considering the purchase of an asset that saves cost of $110,000, cost of assets is $840,000 and life is 10 years.