Free Cash Flow

Sweeter Enterprises Inc. has cash flows from operating activities of $359,000. Cash flows used for investments in property, plant, and equipment totaled $68,000, of which 60% of this investment was used to replace existing capacity.

a. Determine the free cash flow for Sweeter Enterprises Inc.

$??

b. How might a lender use free cash flow to determine whether or not to give Sweeter Enterprises Inc. a loan?

Free cash flow is often used to measure the financial strength of a business. The________(More/Less) free cash flow that a business has, the easier it will be for the company to pay the interest on the loan and repay the loan principal. Sweeter's free cash flow is $____, which is very ____(Strong/Weak)