Question

Trent Co. reports the following information: Net cash provided by operating activities $430,000 Average current liabilities 300,000 Average long-term liabilities 200,000 Dividends paid 120,000 Capital expenditures 220,000 Purchase of treasury stock 22,000 Payments of debt 70,000 Trent’s free cash flow is

Answer 1

$90,000

Step-by-step explanation:

Data provided in the question:

Net cash provided by operating activities = $430,000

Average current liabilities = $300,000

Average long-term liabilities = $200,000

Dividends paid = $120,000

Capital expenditures = $220,000

Purchase of treasury stock = $22,000

Payments of debt = $70,000

Now,

Trent's Free cash flow

= Net cash provided by operating activities - Capital expenditures - Dividends paid

= $430,000 - $220,000 - $120,000

= $90,000