(1) Use the following income statements and balance sheets to calculate Garnet Inc.'s free cash flow for 2011. Income Statement Net sales 2011 $530.0 Costs (except depreciation) 400.0 Depreciation 30.0 Total operating costs $430.0 Earnings before interest and taxes (EBIT) 100.0 Less interest 23.0 Earnings before taxes Taxes (40%) Net income $77.0 30.8 $46.2 2010 $500.0 380.0 25.0 $405.0 Balance Sheet Assets Cash Marketable securities 69.0 Accounts receivable 84.0 Inventories 112.0 Total current assets $293.0 Net plant and equipment 281.0 Total assets Liabilities and Equity $574.0 2011 $ 28.0 21.0 $ 74.0 29.6 $ 44.4 95.0 2010 $ 27.0 66.0 80.0 106.0 $279.0 265.0 $544.0 Accounts payable $56.0 $ 52.0 Notes payable 138.0 130.0 Accruals 28.0 28.0 Total current liabilities $222.0 $210.0 Long-term bonds 173.0 164.0 Common stock 100.0 100.0 Retained earnings 79.0 70.0 Common equity $179.0 $170.0 Total liabilities and equity $574.0 $544.0