McMahon Inc. reported the following on the company’s statement of cash flows in Year 2 and Year 1: Year 2 Year 1Net cash flow from operating activities $ 294,000 $ 280,000Net cash flow used for investing activities (224,000) (252,000)Net cash flow used for financing activities (63,000) (42,000)Seventy percent of the net cash flow used for investing activities was used to replace existing capacity.a. Determine McMahon’s free cash flow for both years.b. Has McMahon’s free cash flow improved or declined from Year 1 to Year 2?
McMahon Inc. reported the following on the company’s statement of
Year 2 Year 1
Net cash flow from operating activities $ 294,000 $ 280,000
Net cash flow used for investing activities (224,000) (252,000)
Net cash flow used for financing activities (63,000) (42,000)
Seventy percent of the net cash flow used for investing activities was used to replace existing capacity.
a. Determine McMahon’s
b. Has McMahon’s free cash flow improved or declined from Year 1 to Year 2?
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