Question: 16
(Choose 1 answer)
Champagne, Inc.. had revenues of $12 million, cash operating expenses of $8 million, and depreciation and
amortization of $1.5 million during 2020. The firm purchased $700,000 of equipment during the year while
increasing its inventory by $500.000 (with no corresponding increase in current liabilities). The marginal tax rate
for Champagne is 30 percent.
What are Champagne's cash flows associated with investments for 2020?
A. $500,000
B. $700,000
C. $1,200,000
D. $1,700,000
