Problem 2: DETERMINING THE FREE CASH FLOW FOR AN APPAREL FIRM

Suppose an apparel company generated a Net Income of $45 million in the most recent reporting year. The firms Earnings Before Interest Taxes and Depreciation (EBITDA or EBDIT) equaled $130 million, and the Net Operating Profit (EBIT) was $100 million. If we know that the firms marginal tax rate equaled 40%, that the firms accounts receivables increased by $40 million and the inventory decreased by $10 million, and that the firms accounts payables increased by $15 million and its short-term bank line of credit increased by $10 million as well, and if the firm furthermore invested $50 million in long-term operating assets in the past year, what is the firms Free Cash Flow over this period? Show your calculations using both the bottom-up and the top- down approach.

please include all workings so I can understand clearly. thank you!