14.)C. F. Lee Inc. has the following income statement. How much after-tax operating income does the firm have?

Sales	$	3,500.00
Costs		1,900.00
Depreciation		216.00
EBIT	$	1,384.00
Interest expense		285.00
EBT	$	1,099.00
Taxes (25%)		274.75
Net income	$	824.25

a. $1,254.00

b. $1,099.00

c. $1,200.00

d. $824.25

e. $1,038.00

15.)Watson Oil recently reported (in millions) $8,250 of sales, $5,750 of operating costs other than depreciation, and $1,275 of depreciation. The company had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow?

a. $155.00 million

b. $1,095.00 million

c. $145.00 million

d. $8.75 million

e. $151.25 million

16.)Company Z has $65,000 of taxable income from its operations, $7,000 of interest income, and $38,000 of dividend income from preferred stock it holds in other corporations. Its corporate tax rate is 25%. What is Company Zs tax liability? Assume a 50% dividend exclusion for taxes on dividends.

a. $22,750

b. $18,000

c. $16,250

d. $27,500

e. $25,750