During 2020, Klugman Industries reported cash provided by operations of $1,185,000, cash used in investing of $1,372,000, and cash used in financing of €180,000

Finance Jun 23, 2021

During 2020, Klugman Industries reported cash provided by operations of $1,185,000, cash used in investing of $1,372,000, and cash used in financing of €180,000. In addition, cash spent for fixed assets during the period was $552,000. No dividends were paid. Based on this information, what was Klugman's free cash flow?

a. ($187,000)

b. $2,185,000

c. $633,000

d. ($919,000)

Expert Solution

Computation of Free Cash Flow:

Free Cash Flow = Net cash provided by operating activities - Cash spent for capital assets

= $1,185,000 - $552,000

= $633,000

So,

Klugman's Free cash flow is $633,000.

So, the correct option is C "$633,000".

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