From the following information, calculate the net increase in cash. earnings before interest and taxes $52,000. depreciation expense 7,800. decrease in prepaid expenses 1.700. increase in accounts receivable 12,880. purchase of machinery 32,700. payment of dividends 11,300. increase in bank borrowings 8,600.

The net increase in cash will be a negative $32,020.

In this problem, we are starting with $52,000 in cash. All we have to do is following the steps to see where we end up at.

52000 - 7800 = 44200    Depreciation Expense
44200 - 1700 = 42500     Decrease in Prepaid Expenses
42500 + 12880 = 55380    Increase in Accounts Receivable
55380 - 32700 = 22680     Purchase of Machinery
22680 - 11300 = 11380     Payment of Dividends
11380 + 8600 = 19980   Increase in Bank Borrowing

The net amount of change is 19980 - 52000 = -$32,020

Yes, that is the correct formula. to solve this problem given the number of years, plug in the number of years for t and plug the whole thing into the