2. (10 pts) Use PAP's Company's balance sheets and income statement below to calculate its free cash flows from operations. (10 pts) How does PAP use free cash flows from operations (be specific - where do the free cash flows come from or go to - what are their levels?)? \begin{tabular}{|c|r|r|} \hline \multicolumn{3}{|c|}{ PAP Inc. Income Statements } \\ \multicolumn{2}{|c|}{ (000's) } \\ \hline & 2019 & 2020 \\ \hline Sales & $1,200 & $1,450 \\ \hline COGS & 700 & 850 \\ \hline Gross Profit & $500 & $600 \\ \hline Selling, & 30 & 40 \\ general, ADM & & \\ \hline \end{tabular} \begin{tabular}{|r|r|r|} \hline Expenses & & \\ \hline Depreciation & 220 & 200 \\ \hline OperatingIncome & $250 & $360 \\ \hline Interestexpense & 50 & 64 \\ \hline EBT & $200 & $ \\ & 80 & \multicolumn{1}{|c|}{118} \\ \hline Taxes (40\%) & 80 & $178 \\ \hline Net income & $120 & $1 \\ \hline \end{tabular}