Net cash provided by operating activities is $2.3 million.Planned capital expenditures are $2 million.Depreciation expense is $1 million per year.What is free cash flow?
A)($700,000)
B)$300,000
C)$1,000,000
D)$1,300,000

Question

Quizplus · Accepted Answer

Free cash flow is calculated as net cash provided by operating activities minus capital expenditures. Here, $2.3 million - $2 million = $0.3 million or $300,000. Depreciation is a non-cash expense and does not affect the free cash flow calculation directly.

Net Cash Provided by Operating Activities Is $2