Asked by Mackenzie Magaoay on Jul 04, 2024
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Bartling Energy Systems recently reported $9,250 of sales,$5,750 of operating costs other than depreciation,and $700 of depreciation.The company had no amortization charges,it had $3,200 of outstanding bonds that carry a 5% interest rate,and its combined federal and provincial income tax rate was 35%.In order to sustain its operations and thus generate sales and cash flows in the future,the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital.By how much did the firm's net income exceed its free cash flow?
A) $673.27
B) $708.70
C) $746.00
D) $783.30
Free Cash Flow
A financial metric that represents the amount of cash generated by a company after accounting for capital expenditures, essential for evaluating its liquidity, flexibility, and overall financial health.
Net Income
The total earnings of a company after subtracting all expenses, including taxes and operating expenses, from its total revenues.
Operating Costs
Expenses associated with the day-to-day operations of a business, including rent, utilities, payroll, and materials.
- Assess the influence of dividends on taxable earnings and determine productive ways to deploy free cash flow.
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Learning Objectives
- Assess the influence of dividends on taxable earnings and determine productive ways to deploy free cash flow.
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