Question
Inland Fisheries Corp. anticipates cash flows from operating activities of $14 million in 2016. It will need to spend $9.5 million on capital investments in
Inland Fisheries Corp. anticipates cash flows from operating activities of $14 million in 2016. It will need to spend $9.5 million on capital investments in order to remain competitive within the industry. Common share dividends are projected at $2.10 million and preferred dividends at $1.35 million.
a. What is the firms projected free cash flow for the year 2016? (Enter the answer in millions. Round the final answer to 2 decimal places.)
Free cash flow $--------- million
b. What does the concept of free cash flow represent? multiple choice
1)Free cash flow equals cash flow from operating activities.
2)Free cash flow represents the funds that are available for special financial activities, such as the acquisition of another firm especially when it is a leveraged buyout.
3)Free cash flow represents the funds that are available for investing activities, such as purchase of plant and equipment.
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