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Use the financial statements and additional data provided by management to calculate the firm's Free Cash Flow for the projected year.

Tax rate = 25%

Plans for the projected year will require $1,000 of new machinery and equipment

Firm expects next year's dividend to be $260

Acme Products, Inc.				Acme Products, Inc.
Balance Sheets				Income Statement
ASSETS	current yr	projected yr			projected yr
Cash	400	500		Sales (all credit)	7,500
Receivables	600	750		Cost of Goods Sold	4,500
Inventory	900	1,125		Gross Profit	3,000
Property, plant & equipment	2,200	2,750		Operating expenses	400
Total assets	4,100	5,125		Depreciation	500
				Operating income	2,100
LIABILITIES & EQUITY				Interest expense	100
Accounts payables	500	625		Taxable income	2,000
Accrued expenses	400	500		Taxes (25%)	500
Long-term debt	1,400	1,750		Net income	1,500
Common stock	600	750
Paid-in Capital	200	250
Retained earnings	1,000	1,250
Total liabilities and equity	4,100	5,125