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Ronch [10]
3 years ago
11

During the​ year, Xero,​ Inc., experienced an increase in net fixed assets of $ 300 comma 000 and had depreciation of $ 204 comm

a 000. It also experienced an increase in current assets of $ 146 comma 000 and an increase in accounts payable of $ 73 comma 000. If operating cash flow ​(OCF​) for the year was $ 697 comma 000​, calculate the​ firm's free cash flow​ (FCF​) for the year.
Business
1 answer:
ElenaW [278]3 years ago
5 0

Answer:

$120,000

Explanation:

NFAI = Change in net fixed assets + Depreciation

         = $300,000 + $204,000

         = $504,000

NCAI = Change in current assets - Change in accounts payable

         = $146,000 - $73,000

         = $73,000

OCF = $697,000

FCF = OCF - NFAI - NCAI

       = $697,000 - $504,000 - $73,000

       = $120,000

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