Answer: $440,000
Explanation:
From the question, we are informed that the net cash flow from operating activities is $500,000, the net cash flow used for investing activities is (200,000) and that the net cash flow used for financing activities 150,000. We are further told that thirty percent of the cash flow used for investing activities was used to purchase property, plant, and equipment.
The free cash flow for 20Y7 will be:
= $500,000 - ($200,000 × 30%)
= $500,000 - ($200,000 × 0.3)
= $500,000 - $60,000
= $440,000
