Answer:
The free Cash Flow for the year 20Y6 amounts to $290,000
Explanation:
The free cash flow for the year 20Y6 is computed as:
Free Cash Flow for the year 20Y6 = Net cash flow from operating activities - Cash used to purchase the equipment, property and plant
= $350,000 - $60,000
= $290,000
where
Net cash flow from operating activities is $350,000
Cash used to purchase the equipment, property and plant is computed as:
Cash used to purchase the equipment, property and plant = 60% × Net cash flow used for the investing activities
= $100,000 × 60%)
= $60,000
