Simbad Industries has cash flows from operating activities of $720,000. Cash flows used for investments in property, plant and equipment totaled $440,000 of which 85% of it was used to replace existing capacity. Determine the free cash flow of Simbad Industries How might a lender use free cash flow to determine whether or not to give Simbad Industries a loan?
Simbad Industries has cash flows from operating activities of $720,000. Cash flows used for investments in property, plant and equipment totaled $440,000 of which 85% of it was used to replace existing capacity. Determine the free cash flow of Simbad Industries How might a lender use free cash flow to determine whether or not to give Simbad Industries a loan?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Simbad Industries has
cash flows from operating activities of $720,000. Cash flows used for investments in property, plant and equipment totaled $440,000 of which 85% of it was used to replace existing capacity.
- Determine the
free cash flow of Simbad Industries
- How might a lender use free cash flow to determine whether or not to give Simbad Industries a loan?
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