Dora Inc. reported the following on the company's statement of cash flows: Net cash flows from operating activities $380,000 Net cash flows used for investing activities (130,000) Net cash flows used for financing activities (230,000) 65% of the net cash flows used for investing activities was used to purchase property, plant, and equipment. What is the free cash flow? a.$250,000 b.$295,500 c.$464,500 d.$150,000

Dora Inc. reported the following on the company's statement of cash flows: Net cash flows from operating activities $380,000 Net cash flows used for investing activities (130,000) Net cash flows used for financing activities (230,000) 65% of the net cash flows used for investing activities was used to purchase property, plant, and equipment. What is the free cash flow? a.$250,000 b.$295,500 c.$464,500 d.$150,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Dora Inc. reported the following on the company's statement of cash flows:

Net cash flows from operating activities	$380,000
Net cash flows used for investing activities	(130,000)
Net cash flows used for financing activities	(230,000)

65% of the net cash flows used for investing activities was used to purchase property, plant, and equipment. What is the free cash flow?

a.$250,000

b.$295,500

c.$464,500

d.$150,000

Definition Definition Cash that is left over after a company has paid for its operating and capital expenses. Unlike net income or earnings, free cash flow excludes non-cash expenses of the income statement and includes the expenditures on equipment and assets. Free cash flow also helps potential shareholders to evaluate how quickly the company can pay interest and dividends.

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