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McMahon Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1: Year 2 Year 1 Net cash flow
McMahon Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1:
Year 2 | Year 1 | |||
---|---|---|---|---|
Net cash flow from operating activities | $294,000 | $280,000 | ||
Net cash flow used for investing activities | (224,000) | (252,000) | ||
Net cash flow used for financing activities | (63,000) | (42,000) |
Seventy percent of the net cash flow used for investing activities was used to replace existing capacity.
a. Determine McMahon's free cash flow for both years.
Year 2 | $ |
Year 1 | $ |
b. Has McMahon's free cash flow improved or declined from Year 1 to Year 2?
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