Q9. The Free Cash Flow to Equity is computed as $762,000. In our computation depreciation and interest were $50,000 and $40,000 respectively. Additional working capital and capital expenditures were $50,000 and $60,000 respectively.

a. The EBIT should be closer to: a. $800,000 b. Less than $799,999 c. More than $800,001 d. 60% of sales e. Cannot be computed

b. If the computed EBIT is 25% of sales and EBIT is $500,000 the total sales should be

a. $2,000,000

b. $3,200,000

c. More than $3,200,000

d. Less than $2,000,000

e. Cannot be computed