Giglio Inc

question 30

Multiple Choice

Giglio Inc. has the following information for the previous year: Net income = $400; Net operating profit after taxes (NOPAT) = $500; Total assets = $2,000; and Total operating capital = $1700. The information for the current year is: Net income = $800; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,300; and Total operating capital = $2100. What is the free cash flow for the current year?

• A) $300
• B) $400
• C) $500
• D) $600
• E) $700

---

Definitions:

Idle Capacity

The portion of a company's resources or production capacity that is not being used in production but still incurs costs.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to related products and services based on the activities they require.

Resource Consumption

The act of using resources, such as materials, time, and energy, in the process of producing goods and services.

Activity-Based Costing

Activity-based costing is an accounting method that assigns costs to products and services based on the activities and resources that go into producing them.