Computation of free cash flow

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Computation of free cash flow from given data.

Given the following financial statements for ACME Corporation, what is the company's free cash flow for 2004?
Income Statement Balance Sheet

Year Ended 12/31/04 12/31/04 12/31/03
Sales $1,500,000 Current Assets $50,000 $35,000
Cost of Goods Sold 700,000 (Gross Fixed Assets 1,100,000 750,000)
Operating Expenses 400,000 Net Fixed Assets $450,000 $300,000
Depreciation 200,000 Total Assets $500,000 $335,000
EBIT 200,000 Current Liabilities $25,000 $30,000
Interest Expense 50,000 Long-term Debt 340,000 230,000
EBT 150,000 Common Stock 5,000 5,000
Taxes 45,000 Retained Earnings 130,00070,000
Net Income $ 105,000 Total Liab & Equity $500,000 $335,000

a. -$15,000
b. $170,000
c. -$65,000
d. $185,000

Reference no: EM1313822

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