Question

Suppose that Splish Brothers Inc. produced and sold 4800 laptop computers during 2017. It reported $156000...

Suppose that Splish Brothers Inc. produced and sold 4800 laptop computers during 2017. It reported $156000 cash provided by operating activities. In order to maintain production at 4800 laptops, Splish invested in $10320 in equipment. Splish paid $1680 in dividends. What is Splish's free cash flow?

$144000

$168000

$163000

$156000
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Answer #1
Solution:
Calculation of Free Cash Flow
Amount in $ Amount in $
Cash flows from Operating Activities $           1,56,000
Less: Cash Flow from invested in Equipment $              10,320
Less: Cash Paid for Dividend $                 1,680
Free Cash Flow $       1,68,000
Answer = Option 2 = $ 168,000
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