Obermeyer Corporation issued the following statement of cash flows for 2014.

(a) Compute free cash flow for Obermeyer Corporation.

(b) Explain why free cash flow often provides better information than “Net cash provided by operating activities.”

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OBERMEYER CORPORATION Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2014 Cash flows from operating activities $59,000 Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Loss on disposal of equipment Increase in inventory Decrease in accounts receivable $ 9,100 9,500 (5,000) 3,300 (2,200) Decrease in accounts payable 14,700 Net cash provided by operating activities Cash flows from investing activities Sale of investments 73,700 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) Payment on long-term note payable Payment for dividends (15,000) Net cash used by financing activities (5,000) Net increase in cash 44,800 13,000 Cash at beginning of year Cash at end of year $57,800