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5 January, 10:30

Murphy & Murphy Enterprises expects the following for 2018: Net cash provided by operating activities of $ 228 comma 000 Net cash provided by financing activities of $ 15 comma 000 Net cash provided by investing activities of $ 68 comma 000 Cash dividends paid to stockholders of $ 19 comma 000 The business plans to spend $ 104 comma 000 to purchase equipment. What is the expected amount of free cash flow for 2018?

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  1. 5 January, 10:45
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    The free cash flow is $105,000

    Explanation:

    Free cash flow=net cash from operating activities-cash dividends-capital expenditure

    net cash flow from operating activities is $228,000

    Cash dividends is $19,000

    Capital expenditure is $104,00

    Free cash flow=$228,000-$19,000-$104,000

    =$105,000

    The free cash flow to equity shareholders in the year 2018 is $105,000

    Free cash flow is the additional cash resources generated by the business in favor of its original owners-the equity shareholders.
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