Final answer:
To calculate Vaughn Corporation's free cash flow, we subtract the cash outflows for capital expenditures and cash dividends from the net cash provided by operating activities. The free cash flow for Vaughn Corporation in 2025 is $205,530.
Step-by-step explanation:
To determine Vaughn Corporation's free cash flow, we need to adjust the net cash provided by operating activities by subtracting cash outflows associated with capital expenditures and dividends. The relevant transactions include payment for land, equipment, and cash dividends. The purchase of treasury stock and retirement of bonds while they impact cash do not directly affect free cash flow.
Calculation of Free Cash Flow:
Net cash provided by operating activities: $404,130
Less: Purchase of land: ($46,300)
Less: Purchase of equipment: ($61,200)
Less: Payment of cash dividend: ($91,100)
Free Cash Flow = Net cash provided by operating activities - Purchase of land - Purchase of equipment - Payment of cash dividend
Free Cash Flow = $404,130 - $46,300 - $61,200 - $91,100
Free Cash Flow = $205,530