Jackson & Murphy Enterprises expects the following for 2017:

The business plans to spend $102,000 to purchase equipment.
What is the expected amount of free cash flow for 2017?
A)$119,000
B)$133,000
C)$94,000
D)$80,000

Question

Jackson & Murphy Enterprises expects the following for 2017:

The business plans to spend $102,000 to purchase equipment.
What is the expected amount of free cash flow for 2017?
A)$119,000 
B)$133,000 
C)$94,000 
D)$80,000

Quizplus · Accepted Answer

A)Free cash flow = Net cash provided by operating activities - Cash payments planned for investments in long-term assets - Cash dividends
Free cash flow = $235,000 - $102,000 - $14,000
Free cash flow = $119,000

Jackson & Murphy Enterprises Expects the Following for 2017