Duke Inc. recently reported $10,750 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company has a federal-plus-state income tax rate of 35%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,550. These expenditures were necessary for it to sustain operations and generate future sales and cash flows. What was its free cash flow?

Hint: First find EBIT

FCF = EBIT(1 - T) + Depreciation - (Capex + Investment in NOWC)

		$2,076
		$2,300
		$1,873
		$2,185
		$1,972