At the end of the last year, King Power Company achieved $6 million in revenue (EBITDA). Depreciation expense was $1.2 million, interest paid $800,000, and the corporate tax rate was 35%. At the end of the fiscal year, the company had $12 million in current assets, $4 million in accounts payable, $1.5 million in accrued debt, $1.3 million in other payables, and $8 million in property, plant, and equipment. Suppose the King Power company has no excess cash, uses debt and equity to finance its operations, has no current liabilities, and recognizes depreciation periodically.

1. Determine the company's net income or loss. Explain how this result can help the manager in making decisions in the company.

2. Calculate the net working and operating capital. Explain the difference between the two results.

3. If the company had $6 million in property, plant, and equipment last year and net operating working capital remained constant, what is the company's free cash flow? Explain how the available flow output helps managers in the financial planning process.