Free cash flow Totson Inc., reported the following on the company’s statement of cash flows in 2012 and 2011: 2012 2011 Net cash flow from operating activities $210,000 $200,000 Net cash flow used for investing activities (160,000) (180,000) Net cash flow used for financing activities (45,000) (30,000) Eighty percent of the cash flow used for investing activities was used to replace existing capacity. a. Determine Totson’s free cash flow. b. Has Totson’s free cash flow inproved or decline from 2011 to 2012?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
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Free cash flow

Totson Inc., reported the following on the company’s statement of cash flows in 2012 and 2011:

2012

2011

Net cash flow from operating activities

$210,000

$200,000

Net cash flow used for investing activities

(160,000)

(180,000)

Net cash flow used for financing activities

(45,000)

(30,000)

Eighty percent of the cash flow used for investing activities was used to replace existing capacity.

a. Determine Totson’s free cash flow.

b. Has Totson’s free cash flow inproved or decline from 2011 to 2012?

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