Based on the Following, What Is Free Cash Flow Cash Flows from Investing Include the Purchase of a Replacement

question 71

Short Answer

Based on the following, what is free cash flow? $\begin{array}{lc}\text { Net cash flow from operating activities } & \$ 318,000 \\\text { Net cash flow used for investing activities } & (30,000) \\\text { Net cash flow from financing activities } & 30,000\end{array}$ Cash flows from investing include the purchase of a replacement asset for $100,000 and the sale of the one used in production, which is now obsolete, for $70,000. Cash flows from financing include $70,000 of borrowing.

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