Year n		Year n-1
1		Short-term investments		-		100
2		Interest		250		100
3		Depreciation and amortization		350		700
4		Common dividends		500		500
5		Cash		550		500
6		Accruals		550		500
7		Notes payable		1,000		200
8		Accounts payable		1,100		1,000
9		Long-term debt		1,500		1,000
10		Inventories		1,650		1,500
11		Accounts receivable		2,750		2,500
12		Common stock		5,000		4,000
13		Operating costs excluding depreciation	9,000		9,500
14		Sales		10,000		12,500
15		Tax rate		40%		40%
16		Net plant and equipment		4,000		4,200
		Questions
		Using the data from Years n and n-1 below, answer the following questions.

1. What is the companys free cash flow in Year n?

2. As an investor, explain how you would use net income and free cash flow in evaluating the company.