A firm paid interest of $60 this year. Last year, they had $400 in debt. This year, they had $800 in debt. What was their CF to creditors? Hint: CF to creditors = interest paid - net borrowing Net borrowing = debt this year - debt last year

A firm paid interest of $60 this year. Last year, they had $400 in debt. This year, they had $800 in debt. What was their CF to creditors? Hint: CF to creditors = interest paid - net borrowing Net borrowing = debt this year - debt last year

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2P: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in...

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

A firm paid interest of $60 this year. Last year, they had $400 in debt. This year, they had $800 in debt. What was their CF to creditors?

Hint: CF to creditors = interest paid - net borrowing

Net borrowing = debt this year - debt last year

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