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Rudik [331]
3 years ago
9

Grossman Lumber reported $102,000 net cash provided by its operating activities. If the company invests $4,000 in capital expend

itures and distributes $8,000 in dividends, its free cash flow will be
A : $102,000.
B : $94,000.
C : $90,000.
D : $98,000.
Business
1 answer:
konstantin123 [22]3 years ago
3 0

Answer:

(C) $90,000

Explanation:

As per the question,

Given data are:

Net cash provided = $102,000

Capital expenditures = $4,000

Dividends = $8,000

Free cash flow can be calculated as:

Free cash flow =

Total cash provided by the company - ( Total expenditures + Dividends)

Therefore.

Free cash flow = $102,000 - ($4,000 + $8,000)

                         = $102,000 - $12,000

                         = $90,000

Hence, the required free cash flow = $90,000

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