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Free Cash Flow Burkhalter Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1: Year 2 Year 1
Free Cash Flow Burkhalter Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1: Year 2 Year 1 $385,000 $367,000 Net cash flows from operating activities Net cash flows used for investing activities (293,000) (330,000) Net cash flows used for financing activities (83,000) (55,000) Seventy percent of the net cash flows used for investing activities was used to replace existing capacity. a. Determine Burkhalter's free cash flow for both years. Year 2 X Year 1 X b. Has Burkhalter's free cash flow improved or declined from Year 1 to Year 2? Improved Feedback Check My Work Free cash flow measures the operating cash flow available to a company to use after purchasing property, plant, and equipment necessary to maintain current productive capacity. Is the total amount for net cash flow used for investing activities used to maintain current productive capacity? Recall what free cash flow is used for and how the change from the prior year to the current year would indicate either an improved or declined free cash flow
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