Here are comparative balance sheets for Migitsu Company. Prepare a statement of cash flows—indirect method. MIGITSU COMPANY
Comparative Balance Sheets December 31
Assets 2020 2019
Cash $75,000 $20,000
Accounts receivable 85,000 75,000
Inventories 172,000 192,000
Land 71,000 100,000
Equipment 262,000 200,000
Accumulated depreciation (67,000) (34,000)
Total $598,000 $553,000
Liabilities and Stockholders’ Equity Accounts payable $35,000 $52,000
Bonds payable 151,000 209,000
Common stock ($1 par) 218,000 172,000
Retained earnings 194,000 120,000
Total $598,000 $553,000
Additional information:
1. Net income for 2020 was $105,000.
2. Cash dividends of $31,000 were declared and paid.
3. Bonds payable amounting to $58,000 were redeemed for cash $58,000.
4. Common stock was issued for $46,000 cash.
5. Equipment that cost $50,000 and had a book value of $30,000 was sold for $36,000 during 2020; land was sold at cost.
What is the free cash flow for 2020?

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept, the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year. to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51