6. (TCO C) This is a 2-part question.

Part 1) Indicate which section of the statement of cash flows should contain each of the following items, and whether each item would result in an inflow or outflow of cash. The sections are Operating, Investing, and Financing.

(a) Amortization of a patent

(b) Increase in accounts payable

(c) Paid cash dividends to common stockholders

(d) Purchased equipment with cash

(e) Increase in inventory

Part 2) Please explain how to calculate free cash flow and the importance of free cash flow to investors. (6 points) (Points : 36)