Question: Iglesias Enterprises, Inc. has cash flows from operating activities or $385,000. Cash flows used for investments in property, plant, and equipment totaled $145,000, of which

Iglesias Enterprises, Inc. has cash flows from operating activities or $385,000. Cash flows used for investments in property, plant, and equipment totaled $145,000, of which 80% of this investment was used to replace existing capacity.
a. Determine the free cash flow for Iglesias Enterprises, Inc.
b. How might a lender use free cash flow to determine whether or not to give Iglesias Enterprises, Inc. a loan?

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