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Wells Inc. recently reported $8,250 of sales, $4,500 of operating costs other than depreciation, $950 of depreciation expense, and $220 of interest expense. Its federal-plus-state
Wells Inc. recently reported $8,250 of sales, $4,500 of operating costs other than depreciation, $950 of depreciation expense, and $220 of interest expense. Its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to spend $750 to buy new fixed assets and to invest $250 in net operating working capital. How much free cash flow did Wells generate?
Select one:
a. $1,049
b. $820
c. $858
d. $951
e. $1,151
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