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Example Exercise 16-8 McMahon Inc. reported the following on the company's statement of cash flows...

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Accounting

Example Exercise 16-8

McMahon Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1:

Seventy percent of the net cash flow used for investing activities was used to replace existing capacity.

  1. Determine McMahon's free cash flow for both years.

  2. Has McMahon's free cash flow improved or declined from Year 1 to Year 2?

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