Question

Cash flows from operating activities are $200,000; cash flows from financing activities are $150,000; capital expenditures are $90,000; and dividends are $20,000.
a. How much is free cash flow?

Answer 1

Answer:

free cash flow is $90,000

Explanation:

given data

operating activities = $200,000

cash flows from financing activities = $150,000

capital expenditures = $90,000

dividends = $20,000

solution

we get here free cash flow that is express as

free cash flow = operating activities -  capital expenditures - dividends paid   ..................1

put here value and we get

free cash flow = $200,000 - $90,000 - $20,000

free cash flow =  $90,000

so free cash flow is $90,000