Final answer:
To calculate the free cash flow for Outdoor Lighting Supply for 2018, add the net cash from operating and investing activities, then subtract cash dividends and capital expenditures. The correct calculation gives a free cash flow of $181,000, which is not listed among the answer choices provided by the student. Therefore correct option is E
Step-by-step explanation:
The student is asking how to calculate the free cash flow for Outdoor Lighting Supply in 2018. To find this, we first add net cash provided by operating activities to net cash provided by investing activities, and then subtract cash dividends paid to stockholders and any significant capital expenditures. Using the provided numbers:
- Net operating activities: $284,000
- Net investing activities: $76,000
- Cash dividends paid: $29,000
- Capital expenditure (modernizing showroom): $150,000
The calculation will be as follows:
Free Cash Flow = (Net Operating Activities + Net Investing Activities) - (Dividends Paid + Capital Expenditure)
Free Cash Flow = ($284,000 + $76,000) - ($29,000 + $150,000)
Free Cash Flow = $360,000 - $179,000
Free Cash Flow = $181,000
It appears that there may be a mistake in the student's group of answer choices, as the correct calculation based on the provided numbers results in $181,000, which is not listed in the choices.
Question
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outdoor lighting supply expects the following for 2018: net cash provided by operating activities of $284,000 net cash provided by financing activities of $67,000 net cash provided by investing activities of $76,000 cash dividends paid to stockholders of $29,000 outdoor expects to spend $150,000 to modernize its showroom. how much free cash flow does outdoor expect for 2018? group of answer choices
A) $112,000
B) $134,000
C) $264,000
D) $105,000
E) $181,000