Question Seven: How much free cash flow did Wells generate?

Wells Water Systems recently reported $8,250 of sales, $4,500 of operating costs other than depreciation, and $950 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and its federal-plusstate income tax rate was 35%. In order to sustain its operations and thus generate sales and cash ows in the future, the rm was required to spend $750 to buy new xed assets and to invest $250 in net operating working capital. How much free cash ow did Wells generate? Select the correct answer. C"; a. $1,753 C"; b. $1,747 C"; c. $1,764 C"; d. $1,770 C"; e. $1,758