{"id":57830,"date":"2024-04-16T01:08:52","date_gmt":"2024-04-16T01:08:52","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=57830"},"modified":"2024-04-16T01:08:52","modified_gmt":"2024-04-16T01:08:52","slug":"in-the-calculation-of-net-profit-of-rs-1500000-for-the-period-rs-20000-profit-on-sale-of-an-asset-and-rs-10000-depreciation-have-been-taken-into-consideration-in-this-case-funds-from-operatio","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-the-calculation-of-net-profit-of-rs-1500000-for-the-period-rs-20000-profit-on-sale-of-an-asset-and-rs-10000-depreciation-have-been-taken-into-consideration-in-this-case-funds-from-operatio\/","title":{"rendered":"In the calculation of net profit of Rs. 15,00,000 for the period, Rs. 20,000 profit on sale of an asset and Rs. 10,000 depreciation have been taken into consideration. In this case funds from operations will be"},"content":{"rendered":"

[amp_mcq option1=”Rs. 15,00,000″ option2=”Rs. 15,30,000″ option3=”Rs. 14,90,000″ option4=”Rs. 15,10,000″ correct=”option3″]<\/p>\n

The correct answer is: C. Rs. 14,90,000<\/strong><\/p>\n

Funds from operations (FFO) is a measure of a company’s cash flow from its operating activities. It is calculated by adding back non-cash expenses, such as depreciation and amortization, to net income.<\/p>\n

In this case, the net profit of Rs. 15,00,000 includes a profit on sale of an asset of Rs. 20,000 and depreciation of Rs. 10,000. Therefore, the funds from operations are calculated as follows:<\/p>\n

FFO = Net income + Depreciation + Amortization
\n= Rs. 15,00,000 + Rs. 10,000 + Rs. 20,000
\n= Rs. 14,90,000<\/p>\n

Option A is incorrect because it is the same as the net profit. Option B is incorrect because it includes the profit on sale of an asset, which is a non-cash item. Option D is incorrect because it subtracts the depreciation, which is a non-cash item.<\/p>\n","protected":false},"excerpt":{"rendered":"

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In this case funds from operations will be<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/in-the-calculation-of-net-profit-of-rs-1500000-for-the-period-rs-20000-profit-on-sale-of-an-asset-and-rs-10000-depreciation-have-been-taken-into-consideration-in-this-case-funds-from-operatio\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In the calculation of net profit of Rs. 15,00,000 for the period, Rs. 20,000 profit on sale of an asset and Rs. 10,000 depreciation have been taken into consideration. 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