Register
In the current year, Mosely Company reported a net cash inflow from operating activities of $140,000. It also collected $10,000 from shareholders by issuing additional shares of its stock. It paid a $5,
145k views
1 vote
In the current year, Mosely Company reported a net cash inflow from operating activities of $140,000. It also collected $10,000 from shareholders by issuing additional shares of its stock. It paid a $5,000 note payable, $25,000 for equipment, and $15,000 as dividends. What is the company’s free cash flow?

User James Morcom
by
5.1k points

1 Answer

4 votes

Answer:

$115,000

Step-by-step explanation:

In calculating free cash flow the formula is stated below:

FCF=EBIT(1-tax rate)+depreciation and amortisation-changes in working capital-Capital Expenditure

In this scenarion only EBIT(earnings before interest and tax of $140,000) and capital expenditure are available.

By substituting the two known variables into the formula, the answer gives $115,000 as stated above.

User AYESIGYE DERRICK
by
5.0k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.7m questions

7.5m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!