Could someone check my work? I'm a bit confused because it seemed too simple.
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
