Chapter 12, Problem 12.2EYCT

(a)

To determine

Free cash flow: It describes the net cash provided from operating activities after making required adjustments for dividends and capital expenditures. In other words, it is the cash flow arrived after making payment for capital expenditures and dividend payments.

To Compute: Free cash flow of CS Company and VF Corporation.

(b)

To determine

To Conclude: Decision with regards to management of cash from the above data.