Question 10 of 5 Watson Oil recently reported (in millions) $8,250 of sales, $5.350 of operating costs other than depreciation, and $775 of depreciation. The company had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $1,500 of capital expenditures on new fixed assets and to invest $400 in net operating working capital. By how much did the firm's net income exceed its free cash flow? a. 560.00 million b, 51,005.00 million c. $473.75 million d. 5633.75 million e. $495.00 million Question 11 of 50 Arvo Corporation is trying to choose between three alternative investments. The three securities that the company is considering are as follows: Tax-free municipal bonds with a return of 8.50%. Wooll Corporation bonds with a return of 10.80%. SF Corp. preferred stock with a return of 9.60%. The company's tax rate is 25.00%. What is the after-tax return on the best investment alternative? Assume a 50.00% dividend exclusion for taxes on dividends. (Round your final answer to 3 decimal places.) a. 8.100% b. B.400W c9.450% d. 8 500W .7.2004