Question: 14
(Choose 1 answer)
Provo, Inc., had revenues of $10 million, cash operating expenses of $5 million, and depreciation and amortization.
of $1 million during 2020. The firm purchased $500,000 of equipment during the year while increasing its inventory
by $300,000 (with no corresponding increase in current liabilities). The marginal tax rate for Provo is 40 percent.
What is Provo's cash flows associated with investments for 2020?
A. $300,000
B. $500,000
C. $800,000
D. $1,000,000
