Question $2$ options:

We have seen that Free Cash Flow is a useful measure of a company's sustainability. Consider the case of a finanical investor who is looking to purchase companies that are self$-$financing and do not require external support. This investor is thinking of acquiring $100\%$ of the common equity of Garmendia, Inc. and proceeds to calculate Free Cash Flow from Garmendia's financial statements, below $($$Millions omitted$)$:

Garmendia, Inc.

Balance Sheets

ASSETS

Beginning Ending

Cash $69$

Accts receivable $1320$

Inventory $127$

CURRENT ASSETS $3136$

Fixed Assets

Gross $100115$

Accumulated depreciation $(12)(18)$

Net fixed assets $8897$

TOTAL ASSETS $119133$

LIABILITIES & EQUITY

Accts payable $1721$

Accruals $68$

CURRENT LIABILITIES $2329$

Debt $7159$

Equity $2545$

TOTAL LIABILITIES & EQUITY $119133$

Garmendia, Inc.

Income Statement

Sales $102$

COGs$*32$

Depreciation $6$

Gross Margin $64$

Expenses $31$

EBIT $33$

Interest $5$

EBT $28$

Tax $8$

Net income $20$

$*$Cost of Goods Sold

Garmendia paid no dividends and sold no new stock during the year. The firm's tax rate is $40\%.$ Develop Garmendia's free cash flow and make a recommendation as to whether it seems to be an appropriate acquisition for the investor. Round your answer to one decimal place. Enter your answer in millions of dollars, without the $"$$$".$

Free Cash flow $

millions. $($Hint: If net current assets decreases then then change in current accounts must be positive.$)$

Is this an appropriate investment for the investor $($Yes$/$No$)?$