. You are trying to estimate the free cash flow to the firm on January 1, 2010, for a software company and have been provided with the following information for 2009 (all numbers in millions):

You are also given the following information:

a. The firm invested $180 million in property, plant and equipment in 2009.

b. The firm’s R&D generally takes an average of 4 years to pay off; its R&D expenses were $40 million in 2005, $80 million in 2006, $ 120 million in 2007 and $ 160 million in 2008.

c. Total working capital (including cash) increased by $ 10 million last year but the cash balance decreased by $ 20 million. The firm has no short-­?term debt.

Estimate the free cash flow to the firm in 2009.
 

Revenues - Depreciation & Amortization - R & D expenses - Other operating expenses Operating income - Interest expenses Taxable income - Taxes paid Net Income $ 800 100 $ 200 $ $ 200 300 $ $ 50 $ 250 $ 100 $ 150