Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 $2,880.0 2,448.0 2017 $ 2,400.0 2.040.0 $360.0 $ 432.0 48.0 Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Earnings before interest and taxes (EBIT) Interest Earnings before taxes (EBT) Taxes (40%) 53.0 $ 379.0 $312.0 53.0 63.0 $ 316.0 $ 259.0 126.4 103.6 Net income $ 189.6 $ 155.4 $ 171.0 Common dividends $ 124.0 Powell Panther Corporation: Balance Sheets as of December 31 (Millions of dollars) 2018 2017 $ 28.0 $ 24.0 317.0 634.0 288.0 576.0 $ 979.0 $ 888.0 528.0 $ 1,507.0 480.0 $ 1,368.0 $ 187.0 $ 144.0 Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total liabilities Common stock Retained earnings Common equity Total liabilities and equity 120.0 96.0 58.0 48.0 $ 365.0 $ 288.0 576.0 480.0 $ 941.0 $ 768.0 500.4 553.0 65.6 47.0 $ 566.0 $ 600.0 $ 1,368.0 $ 1,507.0 a. What was net operating working capital for 2017 and 2018? Assume the firm has no excess cash. 2017: $ 2018: $ b. What was the 2018 free cash flow? $ C. How would you explain the large increase in 2018 dividends? I. The large increase in net income from 2017 to 2018 explains the large increase in 2018 dividends. II. The large increase in free cash flow from 2017 to 2018 explains the large increase in 2018 dividends. III. The large increase in EBIT from 2017 to 2018 explains the large increase in 2018 dividends. IV. The large increase in sales from 2017 to 2018 explains the large increase in 2018 dividends. V. The large increase in retained earnings from 2017 to 2018 explains the large increase in 2018 dividends