Question

Sprouts Corporation reported net cash provided by operating activities of $412,000, net cash used by investing activities of $250,000, and net cash provided by financing activities of $70,000. In addition, cash spent for capital assets during the period was $200,000. No dividends were paid. Calculate free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Answer:

$32,000.00

Explanation:

Free cash flow is net cash inflow after all of the items.

Here, Inflow from operating activities - Used in investing activities + Inflow from financing activities - Cash outflow on capital assets = Free cash flow

= $412,000.00 - $250,000.00 + $70,000.00 - $200,000.00 = $32,000.00

Note: Generally amount used in purchasing capital assets is part of investing activity, here it is not part of such activity as it is given in addition.

Therefore, free cash flow = $32,000.00