Inland Fisheries Corp. anticipates cash flows from operating activities of $10 million in 20XX. It will need to spend $6.5 million on capital investments in order to remain competitive within the industry. Common share dividends are projected at $0.35 million and preferred dividends at $0.30 million. a. What is the firm's projected free cash flow for the year 20XX? (Enter the answer in millions. Round the final answer to 2 decimal places.) Free cash flow million b. What does the concept of free cash flow represent? Free cash flow equals cash flow from operating activities. Free cash flow represents the funds that are available for special financial activities, such as the acquisition of another firm especially when it is a leveraged buyout. Free cash flow represents the funds that are available for investing activities, such as purchase of plant and equipment.
Inland Fisheries Corp. anticipates cash flows from operating activities of $10 million in 20XX. It will need to spend $6.5 million on capital investments in order to remain competitive within the industry. Common share dividends are projected at $0.35 million and preferred dividends at $0.30 million. a. What is the firm's projected free cash flow for the year 20XX? (Enter the answer in millions. Round the final answer to 2 decimal places.) Free cash flow million b. What does the concept of free cash flow represent? Free cash flow equals cash flow from operating activities. Free cash flow represents the funds that are available for special financial activities, such as the acquisition of another firm especially when it is a leveraged buyout. Free cash flow represents the funds that are available for investing activities, such as purchase of plant and equipment.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Inland Fisheries Corp. anticipates cash flows from operating activities of $10 million in 20XX. It will need to spend $6.5 million on
capital investments in order to remain competitive within the industry. Common share dividends are projected at $0.35 million and
preferred dividends at $0.30 million.
a. What is the firm's projected free cash flow for the year 20XX? (Enter the answer in millions. Round the final answer to 2
decimal places.)
Free cash flow
million
b. What does the concept of free cash flow represent?
Free cash flow equals cash flow from operating activities.
Free cash flow represents the funds that are available for special financial activities, such as the acquisition of another firm
especially when it is a leveraged buyout.
Free cash flow represents the funds that are available for investing activities, such as purchase of plant and equipment.
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