Moskow Corporation issued the following statement of cash fl ows for 2017. LO11 MOSKOW CORPORATION Statement of Cash Flows—Indirect Method For the Year Ended December 31, 2017 Cash fl ows from operating activities Net income $ 59,000 Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense $ 9,100 Decrease in accounts receivable 9,500 Increase in inventory (5,000)
Decrease in accounts payable (2,200)
Loss on disposal of plant assets 3,300 14,700 Net cash provided by operating activities 73,700 Cash fl ows from investing activities Sale of investments 3,100 Purchase of equipment (24,200)
Net cash used by investing activities (21,100)
Cash fl ows from fi nancing activities Issuance of stock 20,000 Payment on long-term note payable (10,000)
Payment for dividends (13,000)
Net cash used by fi nancing activities (3,000)
Net increase in cash 49,600 Cash at beginning of year 13,000 Cash at end of year $ 62,600

(a) Compute free cash fl ow for Moskow Corporation.

(b) Explain why free cash fl ow often provides better information than “Net cash provided by operating activities.”