Sandhill Co. had the following transactions that took place during the year: I.

Question

Sandhill Co. had the following transactions that took place during the year:

I.

Paid amount owing to suppliers $2530.

II.

Purchased new equipment for $4600 by signing a long-term note payable.

III.

Purchased a patent and paid $13800 cash for the asset.

How what is the total effect of these transactions on free cash flow?

Cash Flow

I.

Paid amount owing to suppliers $2530.

II.

Purchased new equipment for $4600 by signing a long-term note payable.

III.

Purchased a patent and paid $13800 cash for the asset.

Explanation / Answer

The total effect of these transactions on free cash flow will be Decrease Last option is correct

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