Obermeyer Corporation issued the following statement of cash flows for 2017.

(a) Compute free cash fl ow 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, 2017 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 equipment Increase in inventory Decrease in accounts receivable $ 9,100 9,500 (5,000) 3,300 Decrease in accounts payable (2,200) 14,700 Net cash provided by operating activities 73,700 Cash flows from investing activities Sale of investments 3,100 Purchase of equipment (27,000) 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 Cash at beginning of year 44,800 13,000 Cash at end of year $57,800