1. PAP Inc.'s financial statements are as follows: PAP Inc. Balance sheet For the Period ended 2016 and 2017 ($000) ASSETS 2016 2017 Cash $ 200 $ 150 Accounts receivable 450 425 Inventory 550 625 CURRENT ASSETS $ 1,200 $ 1.200 Plant & equipment $2,200 $2,600 Less Accumulated (1,000) (1,200) Depreciation Net Plant & equipment $1,200 $1,400 Total Assets $2.400 $2,600 LIABILITIES & Owner's Equity Accounts payable $ 200 $150 Notes Payable current 0 150 (9%) CURRENT LIABILITIES $ 200 $300 Bonds $ 600 $600 Owner's Equity Common stock $900 $900 Retained earnings 700 800 Total Owner's Equity $ 1,600 $1,700 Total liabilities & Equity $2.400 $2,600 PAP Inc. Income Statements (000's) 2016 2017 Sales $1200 $1,450 COGS 700 850 Gross Profit $500 $600 Selling, general 30 40 ADM Expenses Depreciation 220 200 Operating $ 250 $360 Income Interest expense 50 64 EBT $200 $ 296 Taxes (40 %) 80 118 Net income $120 $178 Unavailable PAP Inc. Income Statements (000's) 2016 2017 Sales $1,200 $1,450 COGS 700 850 Gross Profit $500 $600 Selling, general 30 40 ADM Expenses Depreciation 220 200 Operating $ 250 $360 Income Interest expense 50 64 $200 $ 296 Taxes (40 %) 80 118 Net income $120 $178 (10 pts) Using the financial statements above, Calculate PAP Inc.'s free cash flows from operation for year ending in 2017