You have been asked to estimate the free cash flow for last year for Holton Holdings and have collected the following information.

The firm reported EBITDA of $350 million on its revenues of $ 1600 million.

Depreciation and amortization charges amounted to $ 100 million andcapital expenditures were $ 200 million.

Holton spent $ 100 million last year on research and development in its software division, following R&D expenditures of $ 60 million (3 years ago), $ 75 million (2 years ago) and $ 90 million (1 year ago) in the prior three years.

You believe that research expenditures have an amortizable life of 3 years.

The working capital items for the last year and the previous year are reported below.

	Last Year	Year before last
Cash	100 million	80 million
Accounts Receivable	80 million	90 million
Inventory	150 million	100 million
Accounts Payable	130 million	110 million
Short term Debt	150 million	130 million

The tax rate for the firm is 40%.

a. Estimate the value of the research asset of the firm.

b. Estimate the operating income adjusted for R&D expenditures.

c. Estimate the free cash flows to the firm last year.