Question

Amount of funds from operations is Rs. $42,000$ and depreciation on plant and machinery is Rs. $3,000$What is the amount of profit?

• A. Rs. $39,000$
• B. Rs. $45,000$
• C. Rs. $42,000$
• D. Rs. $3,000$

Answer 1

The correct option is A Rs. $39,000$

Funds from operations represents the net profit generated from the actual business operations. All abnormal items have to be excluded from the net profit.

Funds from business operations:

Net Profit Rs.39000

Add: Depreciation Rs. 3000

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Funds from operations Rs.42000

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