Johnson's Nursery Has Net Income of $42,500,depreciation Expense of $1,800,interest

question 61

Multiple Choice

Johnson's Nursery has net income of $42,500,depreciation expense of $1,800,interest expense of $900,taxes of $1,600,additions to net working capital of $2,300,and capital expenditures of $11,700.What is the amount of the free cash flow?

• A) $30,300
• B) $34,400
• C) $31,200
• D) $28,700

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Definitions:

Taxable Income

The amount of income subject to tax, after deductions and exemptions, as determined by tax laws.

Quarterly Dividends

These are dividends paid by a corporation to its shareholders every three months, or four times a year, representing a portion of the company's earnings.

Book Value

The net value of a company's assets minus its liabilities and intangible assets, often used as a measure of a company's actual worth.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a share of the company’s profits.