Consider a company that has the following information (in thousands of dollars):

	20X2		20X1
Sales	100,000		90,000
Net income	8,250		6,540
Interest expense	2,000		1,500
Investment in working capital	4,250		3,540
Depreciation expense	5,000		4,500
Cash flow from operations	9,000		7,500
New capital expenditures	6,500		6,000
Net new borrowing	2,000		2,300
Tax rate	25%		25%

1. Compute free cash flow to the firm for 20X2 and 20X1, and comment on the difference.
2. Compute free cash flow to equity for 20X2 and 20X1, and comment on the difference.