In case the net profits made during the year by a company are ₹50,000 and bills payable have increased by ₹10,000 during the year then the cash flow from operating activities for the company will be:

₹ 60,000

The correct answer is Option (1) - ₹ 60,000.

Increase in current liabilities are added and decrease in current liabilities are deducted from net profit to calculate the cash flow operating activity.

Net profit = 50000
Add: Increase in B/P = 10000
Cash flow from operating activity = (50000 + 10000)
                                                = ₹60000