2. Bandura, LLC, a Boston-based engineering firm, has cash flows for operating activities of $425,000. Cash flows used for investment in property, plant, and equipment totaled $65,000, of which 70% was used to replace machinery to maintain existing capacity. Required: What is the free cash flow for Bandura, LLC? Calculate it and explain what it means.

2. Bandura, LLC, a Boston-based engineering firm, has cash flows for operating activities of $425,000. Cash flows used for investment in property, plant, and equipment totaled $65,000, of which 70% was used to replace machinery to maintain existing capacity. Required: What is the free cash flow for Bandura, LLC? Calculate it and explain what it means.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 7E

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