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Free Cash flow
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 |
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