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Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. Balance Sheets: 2017 2016 Cash and equivalents $100 $85 Accounts receivable 275
Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below.
Balance Sheets: | |||
2017 | 2016 | ||
Cash and equivalents | $100 | $85 | |
Accounts receivable | 275 | 300 | |
Inventories | 375 | 250 | |
Total current assets | $750 | $635 | |
Net plant and equipment | 2,300 | 1,490 | |
Total assets | $3,050 | $2,125 | |
Accounts payable | $150 | $85 | |
Accruals | 75 | 50 | |
Notes payable | 150 | 75 | |
Total current liabilities | $375 | $210 | |
Long-term debt | 450 | 290 | |
Common stock | 1,225 | 1,225 | |
Retained earnings | 1,000 | 400 | |
Total liabilities and equity | $3,050 | $2,125 |
Income Statements: | |||
2017 | 2016 | ||
Sales | $2,100 | $1,700 | |
Operating costs excluding depreciation | 1,250 | 1,000 | |
EBITDA | $850 | $700 | |
Depreciation and amortization | 100 | 75 | |
EBIT | $750 | $625 | |
Interest | 62 | 45 | |
EBT | $688 | $580 | |
Taxes (40%) | 275 | 232 | |
Net income | $413 | $348 | |
Dividends paid | $53 | $48 | |
Addition to retained earnings | $600 | $300 | |
Shares outstanding | 100 | 100 | |
Price | $25.00 | $22.50 | |
WACC | 10.00% |
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash.
Using the financial statements given above, what is Rosnan's 2017 free cash flow (FCF)?
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