Describe the free cash flow in brief

Reference no: EM131881682

Question: You have gathered this information on a firm: $500,000 sales, $10,000 cash dividends, $300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense, $40,000 interest expense, $10,000 purchase of productive equipment, no changes in working capital, and a tax rate of 35%. What is the free cash flow?

Cash flow from operations = net income + interest expense + depreciation - additions to working capital

Free cash flow = cash flow from operations - capital expenditures

Reference no: EM131881682

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