Question

Clayborn Corporation's net cash provided by operating activities was $115,400; its net income was $105,000; its...

Clayborn Corporation's net cash provided by operating activities was $115,400; its net income was $105,000; its income taxes were $47,300; its capital expenditures were $98,100; and its cash dividends were $30,000.

Required:

Determine the company's free cash flow. (Negative amounts should be indicated by a minus sign.)

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Answer #1

Free cash flow = Cash provided by operating activities - capital expenditures - Dividends paid

= 115,400 - 98,100 - 30,000

= -12,700 (minus sign here)

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