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

(a) Compute free cash flow for Chicago Corporation.

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

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Chicago Corporation Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2014 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Loss on disposal of plant assets Decrease in accounts receivable Increase in inventory Decrease in accounts payable Net cash provided by operating activities Cash flows from investing activities Sale of investments Purchase of equipment Net cash used by investing activities $ 8,100 1,300 6,900 (4,000) (2,000) 1,100 (19,000) $ 19,000 10,300 29,300 (17,900)