What was stone creek free cash flow in the year

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A recent annual income statement for Stone Creek Roofing is shown below.

Net sales $5,000

Cost of sales 3,200

Gross profit 1,800

Operating expense 800

Depreciation expense 200

Operating income 800

Interest expense 100

Income before tax 700

Tax 175

Income after tax $525

Problem 1: Assume that during the year, Stone Creek spent $180 on new capital equipment and increased current assets net of non-interest-bearing current liabilities by $120. What was Stone Creek's free cash flow in this year?

Option 1: $425

Option 2: $500

Option 3: $700

Option 4: $725

Option 5: $740

Option 6: None of the options are correct.

Reference no: EM132811345

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