3-17 FREE CASH FLOW Financial information for Powell Panther Corpora Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Earnings before interest and taxes (EBIT) Interest Earnings before taxes (EBT) Taxes (40%) Net income Common dividends 51,000.0 $ 1.200.0 1,0200 5 180.0 30.0 S 150.0 21.7 5 128.3 s 150.0 5 125.0 s 1048 41.9 S 62.9 S 46.4 51.3 $77.0 5 60.5 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 Assets Cash and equivalents Accounts receivable S 10.0 150.0 $ 12.0 180.0 180.0 $ 3720 $ 360.0 250.0 Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable $108.0 $ 90.0 67.0 5247.0 150.0 $397.0 $ 201.5 150.0 $ 351.5 50.0 208.5 s 258.5 $6100 Total current liabilities Long-term bonds Total liabilities Common stock (50 million shares) Retained earnings Common equity Total liabilities and equity $275.0 $6720 a. What was net operating working capital for 2017 and 2018? Assume the firm has no excess cash. b. What was the 2018 free cash flow? c. How would you explain the large increase in 2018 dividends