Question

Free cash flow increased from $120,000 in 2010 to $136,000 in 2011. The percentage change in free cash flow was approximately______ a. 11.76% b. 13.33% c. 1.33% d. 1.76%

e. 3.33%

Answer 1

The percentage change in free cash flow, which increased from $120,000 in 2010 to $136,000 in 2011, is calculated to be 13.33%, matching option b.

Step-by-step explanation:

To calculate the percentage change in free cash flow from 2010 to 2011, we use the formula:

Percentage Change = ((New Value - Old Value) / Old Value) x 100%

Applying the values given:

Percentage Change = (($136,000 - $120,000) / $120,000) x 100% = (16000 / 120000) x 100%

Percentage Change = 0.1333 x 100%

Percentage Change = 13.33%

Therefore, the free cash flow increased by approximately 13.33% from 2010 to 2011, which corresponds to option b.