Dibenedetti Corporation's Net Cash Provided by Operating Activities Was $221,000;

question 82

Essay

Dibenedetti Corporation's net cash provided by operating activities was $221,000; its net income was $200,000; its income taxes were $86,000; its capital expenditures were $146,000; and its cash dividends were $55,000.
Required:
Determine the company's free cash flow.

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Definitions:

Personal Taxes

Taxes levied on individuals' income, capital gains, and other forms of personal wealth.

Operating Leverage

The extent to which fixed costs are used in a firm’s operations. If a high percentage of a firm’s total costs are fixed costs, then the firm is said to have a high degree of operating leverage. Operating leverage is a measure of one element of business risk, but does not include the second major element, sales variability.

EPS

Earnings Per Share, a key financial indicator used to measure a company's profitability on a per-share basis, reflecting the portion of a company's profit allocated to each outstanding share of common stock.

MM Model

The Modigliani and Miller theory, which proposes that under certain conditions, the value of a firm is unaffected by its capital structure.