Houston Pumps recently reported $220,000 of sales, $140,500 of operating costs o

ID: 2636298 • Letter: H

Question

Houston Pumps recently reported $220,000 of sales, $140,500 of operating costs other than depreciation, and $9,250 of depreciation. The company had $35,250 of outstanding bonds that carry a 6.75% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to spend $15,250 to buy new fixed assets and to invest $6,850 in net working capital. What was the firm's free cash flow?

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Answer:

EBIT = Sales

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Houston Pumps recently reported $220,000 of sales, $140,500 of operating costs o

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Houston Pumps recently reported $220,000 of sales, $140,500 of operating costs o

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