1. 1. Free cash flow is calculated as

   1. cash flows from investing activities plus cash used to purchase property, plant, and equipment.
   2. cash flows from operating activities less cash used to purchase property, plant, and equipment.
   3. cash flows from operating activities less cash flow from investing activities less cash flow from financing activities.
   4. cash used to purchase property, plant, and equipment less cash flows from operating activities.

   2. Estill Corporation had the following financial data at year-end:

   Cash flows from operating activities	$52,500
   Cash flows from investing activities	7,000
   Cash flows from financing activities	12,000
   Cash used to purchase property, plant, and equipment	14,280
   Sales	550,275

   What is Estill Corporations ratio of free cash flow to sales?
   1. 1.0%
   2. 6.0%
   3. 6.9%
   4. 9.2%