Murphy & Murphy Enterprises expects the following for 2018: The business plans to spend $107,000 to purchase equipment.
What is the expected amount of free cash flow for 2018?
A)$109,000
B)$125,000
C)$76,000
D)$60,000

Question

Murphy & Murphy Enterprises expects the following for 2018:  The business plans to spend $107,000 to purchase equipment.
What is the expected amount of free cash flow for 2018?
A)$109,000 
B)$125,000 
C)$76,000 
D)$60,000

Quizplus · Accepted Answer

Free cash flow = Net cash provided by operating activities - Cash payments planned for investments in long-term assets - Cash dividends
Free cash flow = $232,000 - $107,000 - $16,000
Free cash flow = $109,000

Murphy & Murphy Enterprises Expects the Following for 2018