Joe Novak Corporation reports the following information: $\begin{array}{lr}
\text { Net cash provided by operating activities } & \$ 215,000 \
\text { Average current liabilities } & 150,000 \
\text { Average long-term liabilities } & 100,000 \
\text { Dividends paid } & 60,000 \
\text { Capital expenditures } & 110,000 \
\text { Payments of debt } & 35,000
\end{array}$
Joe Novak's free cash flow is
A)$10,000.
B)$45,000.
C)$105,000.
D)$155,000.

Question

Joe Novak Corporation reports the following information: $\begin{array}{lr}
\text { Net cash provided by operating activities } & \$ 215,000 \
\text { Average current liabilities } & 150,000 \
\text { Average long-term liabilities } & 100,000 \
\text { Dividends paid } & 60,000 \
\text { Capital expenditures } & 110,000 \
\text { Payments of debt } & 35,000
\end{array}$ 
Joe Novak's free cash flow is
A)$10,000.
B)$45,000.
C)$105,000.
D)$155,000.

Quizplus · Accepted Answer

Free cash flow is calculated as net cash provided by operating activities minus capital expenditures and dividends paid: $215,000 - $110,000 - $60,000 = $45,000.

Joe Novak Corporation Reports the Following Information Joe Novak's Free Cash Flow Is A)$10,000

Joe Novak Corporation Reports the Following Information Joe Novak's Free Cash Flow Is
A)$10,000