Calculating Free Cash Flow for Company Z

In the context of equity valuation, Free Cash Flow (FCF) is a crucial metric used to assess a company's cash-generating ability. FCF is defined as the cash generated by the company's operations after accounting for capital expenditures that are necessary to maintain or expand its asset base.

Consider the following scenario: Company Z forecasts that its operating cash flows for the next year will be $5 million. It expects to spend $2 million on capital expenditures for the same period. Based on this information, what will be the projected Free Cash Flow for Company Z?