Question: The management of Morrow Inc is trying to decide whether
The management of Morrow Inc. is trying to decide whether it can increase its dividend. During the current year, it reported net income of $875,000. It had net cash provided by operating activities of $734,000, paid cash dividends of $70,000, and had capital expenditures of $280,000. Compute the company’s free cash flow, and discuss whether an increase in the dividend appears warranted. What other factors should be considered?
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