Question

Use the following information and the cash flow formulas from chapter two to calculate Interest Paid.
Change in Net Working Capital 13,000
Net Capital Spending 55,000
Dividends Paid 41,000
Net New Borrowing 17,000
Net New Equity Issued 13,000

Answer 1

Interest paid   = $44000
Net capital spending      =    Net new borrwings + Net new equity issued - Dividends paid - Interest paid
-$55000 =   $17000 + $13000 - 41000 - Interest paid
-$55000 = $30000 - $41000 - Interest paid
Interest paid =   $30000 - $41000 +$55000
Interest paid = $44000