Question

Murphy​ & Murphy Enterprises expects the following for​ 2018: Net cash provided by operating activities of $ 228 comma 000 Net cash provided by financing activities of $ 15 comma 000 Net cash provided by investing activities of $ 68 comma 000 Cash dividends paid to stockholders of $ 19 comma 000 The business plans to spend $ 104 comma 000 to purchase equipment. What is the expected amount of free cash flow for​ 2018?

Answer 1

The free cash flow is $105,000

Step-by-step explanation:

Free cash flow=net cash from operating activities-cash dividends-capital expenditure

net cash flow from operating activities is $228,000

Cash dividends is $19,000

Capital expenditure is $104,00

Free cash flow=$228,000-$19,000-$104,000

=$105,000

The free cash flow to equity shareholders in the year 2018 is $105,000

Free cash flow is the additional cash resources generated by the business in favor of its original owners-the equity shareholders.