i'm taking an independent study finance course and i am confused about one of my quiz questions. the question reads:
If cash flow from operations is $938, net capital spending is -$211, and net working capital declines by $73, what is cash flow from assets?
a. $654
b. $800
c. $954
d. $1,076
e. $1,222
I know that cash flow from assets is the operating cash flow minus the capital spending, minus the change in net working capital. My question is, since the net capital spending is a negative number, do I subtract the negative ( by adding it)? Also, does it matter that the net working capital declined instead of increased? Do I treat this as a negative number or just the quantity of "73" because it asked for the CHANGE? Help! My guess is D, but I'm not sure at all. Someone please explain.
