Obermeyer Corporation issued the following statement of cash flows for 2020.

(a) Compute free cash flow for Obermeyer Corporation.

(b) Explain why free cash flow often provides better information than €œNet cash provided by operating activities.€

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Obermeyer Corporation Statement of Cash FlowsIndirect Method For the Year Ended December 31, 2020 Cash flows from operating activities Net income $59,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Loss on disposal of plant assets Increase in inventory $ 9,100 9,500 (5,000) 3,300 (2,200) Decrease in accounts receivable Decrease in accounts payable 14,700 Net cash provided by operating activities 73,700 Cash flows from investing activities Sale of investments 3,100 (27,000) Purchase of equipment Net cash used by investing activities (23,900) Cash flows from financing activities Issuance of stock 20,000 (10,000) (15,000) Payment on long-term note payable Payment for dividends Net cash used by financing activities (5,000) Net increase in cash 44,800 Cash at beginning of year 13,000 Cash at end of year $57,800