Part I. Selected information (in U.S. $ millions) for Alphabet Inc. and Microsoft Corp. for their fiscal 2021 years follows: Alphabet Microsoft Instructions Net cash provided by operating activities Net capital expenditures Dividends paid $91,652 $76,740 24,099 21,544 16,521 a. Calculate the free cash flow for each company. Which company has the better free cash flow? b. Why do you think Microsoft paid dividends while Alphabet did not?

          Part I. Selected information (in U.S. $ millions) for Alphabet Inc. and Microsoft Corp. for their fiscal
2021 years follows:
Alphabet Microsoft
Instructions
Net cash provided by operating activities
Net capital expenditures
Dividends paid
$91,652
$76,740
24,099
21,544
16,521
a. Calculate the free cash flow for each company. Which company has the better free cash flow?
b. Why do you think Microsoft paid dividends while Alphabet did not?

Part I. Selected information (in U.S. millions) for Alphabet Inc. and Microsoft Corp. for their fiscal
2021 years follows:
Alphabet Microsoft
Instructions
Net cash provided by operating activities
Net capital expenditures
Dividends paid91,652
76,740
24,099
21,544
16,521
a. Calculate the free cash flow for each company. Which company has the better free cash flow?
b. Why do you think Microsoft paid dividends while Alphabet did not?

Added by Jose Miguel K.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

11/26/2023

Step 1

Free cash flow is calculated as net cash provided by operating activities minus net capital expenditures. For Alphabet: Free cash flow = $91,652 - $24,099 = $67,553 million For Microsoft: Free cash flow = $76,740 - $21,544 = $55,196 million Show more…

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Part I. Selected information (in U.S. $ millions) for Alphabet Inc. and Microsoft Corp. for their fiscal 2021 years follows: Alphabet: Net cash provided by operating activities: $91,652 Net capital expenditures: $24,099 Dividends paid: $16,521 Microsoft: Net cash provided by operating activities: $76,740 Net capital expenditures: $21,544 Dividends paid: $N/A Instructions: a. Calculate the free cash flow for each company. Which company has the better free cash flow? b. Why do you think Microsoft paid dividends while Alphabet did not?