1. Assume DPH Tree Farm invested $100M in new farmland and borrowed $100M in new long-term debt.
   1. How does this affect DPH's statement of cash flows?
   2. How does this affect DPH's Free Cash Flow?
2. If they reduces their effective tax rate to 28%. How does this affect their FCF?

What is the Free Cash Flow for 2018? DPH TREE FARM, INC. Balance Sheet as of December 31, 2018 and 2017 in millions of dollars 2018 2017 2018 2017 Assets Liabilities and Equity Current assets Current liabilities Cash and marketable securities $245 25 Accrued wages and taxes $20 $ 15 Accounts receivable 70 65 Accounts payable 55 50 Inventory 100 Notes payable 48 45 Total $205 $190 Total $123 $110 Faxed assets Long-term debt **1984 *190 Gross plant and equipment Total debt 315 300 Less: Accumulated 53 40 Stockholders' equity depreciation Net plant and equipment $315 $260 Preferred stock (5 milion shares) $5 $5 Other long-term assets SO 50 Common stock and paid in 40 40 surplus (20 million shares Retained earnings 210 155 Total $365 $310 Total $ 255 $200 Total assets $570 $500 Total liabilities and equity $570 $500 Market price of common $345 DPH TREE FARM, INC. Income Statement of December 31, 2018 and 2017 fin milions of dollars) 2018 2017 Net sales all credit $315 $275 Less Cost of goods sold 133 120 Gross profits $182 $155 Less Other operating expenses 17 Earnings before interest, taxes, depreciation, and $165 $10 amortization (EBITDA Less Depreciation and amortization Earings before interest and taxes (EBIT) $128 Less Interest Earnings before taxes (EBT) $136 $110 Less Tees 46 Net income $ 90 Less Preferred stock dividends $10 $10 Net income available to common stockholders $ 80 $60 Less Common stock dividends 25 25 Addition to retained earings $55 $ 35 Per common share data Earnings per share (EPS) $ 400 $300 Dividends per share DPS) 125 125 Book value per share (BVPS) 12.50 975 Market value price per share (MVPS) 1725 15.60 DE SE * *818181818