3-17 FREE CASH FLOW Financial information for Powell Panther Corporation is shown here. Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $ 1,200.0 $1,000,0 Operating costs excluding depreciation and amortization 1,020.0 850.0 EBITDA $ 180.0 $ 150.0 Depreciation and amortization 30.0 25.0 Earnings before interest and taxes (EBIT) $ 150.0 $ 125,0 Interest 21.7 20.2 Earnings before taxes (EBT) $ 1283 $ 104.8 Taxes (40%) 51.3 41.9 Net income $ 77.0 $ 62.9 Common dividends $ 60.5 $ 46.4 Powell Panther Corporation: Balance Sheets as of December 31 (Milions of dollars) 2018 2017 Assets Cash and equivalents $ 12.0 $ 10.0 Accounts receivable 180.0 150,0 Inventories 180.0 200.0 Total current assets $ 3720 5360.0 Net plant and equipment 300.0 250,0 Total assets $ 672.0 $610,0 Liabilities and Equity Accounts payable $108.0 $ 90.0 Accruals 72.0 60.0 Notes payable 67.0 51.5 Total current liabilities $247.0 $201.5 Long-term bonds 150.0 150.0 Total liabilities $3970 $ 351.5 Common stock (50 million shares) 50.0 50.0 Retained earnings 225.0 208.5 Common equity $275.0 $ 258.5 Total liabilities and equity $672.0 $ 610.0 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