Question 7 10 pts JCB Inc. recently reported $9.0 million in sales, $6.30 million of operating costs other than depreciation, and $500,000 of depreciation. The company had no amortization charges, it had $4.0 million 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 sales and cash flows in the future, the firm was required to make $1.10 million of capital expenditures on new fixed assets and to invest $250,000 in net operating working capital. By how much did the firm's net income exceed its free cash flow? $542,500 $681,250 $495.725 $700,000