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sheree24
May 6, 2007, 07:27 AM
Based on the following, what is free cash flow?

Cash from Operations $150,000
Cash from Financing $30,000
Cash from Investing $(30,000)

Operations includes $2,000 for depreciation. Investing includes the purchase of a replacement asset for $100,000 and the sale of the one used in production, which is now obsolete, for $70,000. Financing is made up of $70,000 of borrowing and $30,000 of dividends paid.

This is my answer.

Cash flow from operating activities: $150,000
Less: Investments in fixed assets to maintain current production 30,000
Free Cash Flow $120,000

CaptainForest
May 6, 2007, 06:40 PM
$120,000 seems to be correct.

https://www.askmehelpdesk.com/accounting/free-cash-flow-87479.html