Presented below is the Statement of Cash Flows for EMG Originals Clothing Company:
Determine the company's free cash flow:
A) ($450,000)
B) $360,000
C) $540,000
D) $510,000

Question

Presented below is the Statement of Cash Flows for EMG Originals Clothing Company:
 Determine the company's free cash flow:
A) ($450,000) 
B) $360,000 
C) $540,000 
D) $510,000

Quizplus · Accepted Answer

Free cash flow = Cash flow from operations - Capital expenditures
X = (Net increase (in cash) from operating activities) - (Payment for purchase of equipment)
X = $1,110,000 - $600,000
X = $510,000

Presented Below Is the Statement of Cash Flows for EMG