On its Statement of Cash Flows, Mike's Motors reported cash flow from operating activities of $108,000, cash flow from investing activities of $87,000, and cash flow from financing activities of ($61,000). Mike's Motors invested $55,000 cash in long-term assets. Mike's Motors' free cash flow is:

Question

Quizplus · Accepted Answer

Free cash flow can be calculated by subtracting capital expenditures (cash used for investing activities) from cash flow from operating activities. 
Free cash flow = Cash flow from operating activities - Capital expenditures 
= $108,000 - $55,000 
= $53,000

On Its Statement of Cash Flows, Mike's Motors Reported Cash