Dhaliwall Groceries has a net loss for the year of $5100, depreciation expense of $25,500, increase in operations (excluding depreciation) of $4,750, and the purchase of capital assets for $3525, there was also a net cash inflow from financing of $7000.What is the amount of net free cash flow?

Question

Quizplus · Accepted Answer

Net free cash flow is calculated as cash flow from operations minus capital expenditures. 
Cash flow from operations = net loss + depreciation expense + increase in operations = -5100 + 25,500 + 4,750 = $25,150 
Capital expenditures = purchase of capital assets = $3525

Net free cash flow = cash flow from operations - capital expenditures = $25,150 - $3525 = $19,125

Therefore, the correct answer is C.

Dhaliwall Groceries Has a Net Loss for the Year of $5100