What is the firm free cash flow

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Ingram Industries recently reported $150,000 of sales, $90,000 of operating costs other than depreciation, and $3,000 of depreciation. The company had no amortization charges, it had $50,000 of bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 40%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $10,000 of capital expenditures on new fixed assets and to invest $2,000 in net operating working capital. What is the firm's free cash flow?

a. $22,425

b. $25,200

c. $30,500

d. $32,700

e. $35,350

Reference no: EM131508947

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