yet answered nts out of 10 Flag question Greshak Corp. recently reported $18,350

ID: 2614620 • Letter: Y

Question

yet answered nts out of 10 Flag question Greshak Corp. recently reported $18,350 of sales, $9,900 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges, it had $4,500 of outstanding bonds that carry a 10.0% interest rate, and its federal-plus-state income tax rate was 30%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to spend $2,850 to buy new fixed assets and to invest $1,625 in net operating working capital. How much free cash flow did Greshak generate? Select one: O A. ($ 120.00). B. $ 415.00. C. $1,815.00. D. $ 710.00. E. $1,180.00. Previous page Next page d 7:44 PM 6/13/2018 FB F9 F10 F11 F12 PrtScr Insert Delete ok Backsparce

Explanation / Answer

Free Cash Flow = $1,815

Free Cash Flow = Net Operating cash flow – Additional Capital Expenditures – Net Changes in working capital

Net Operating cash flow

Particulars

Amount ($)

Sales

18,350

Less : Operating Costs

(9,900)

Less : Depreciation

(1,250)

Operating profit before tax

7,200

Less : Tax at 30%

(2,160)

Operating profit after tax

5,040

Add Back : Depreciation

1,250

Net Operating cash flow

6,290