McMahon Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1:

Seventy percent of the net cash flow used for investing activities was used to replace existing capacity.

1. Determine McMahon's free cash flow for both years.

2. Has McMahon's free cash flow improved or declined from Year 1 to Year 2?

Please provide a detailed explanation for the answers. I will upvote. Thank you!

Net cash flow from operating activities Net cash flow used for investing activities Net cash flow used for financing activities Year 2 $ 294,000 (224,000) (63,000) Year 1 $ 280,000 (252,000) (42,000)