Greshak Enterprises recently reported $10,450 of sales, $5,800 of operating costs other than depreciation, and $875 of depreciation. The company had no amortization charges, it had $6,000 of outstanding bonds that carry a 5.0% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to spend $985 to buy new fixed assets and to invest $400 in net operating working capital. How much free cash flow did Greshak generate?

Select one:

A.

$2,321

B.

$1,446

C.

$1,961

D.

$2,051

E.

$3,121