You Have Gathered This Information on a Firm: $500,000 Sales,$10,000

question 92

Multiple Choice

You have gathered this information on a firm: $500,000 sales,$10,000 cash dividends,$300,000 cost of goods sold,$20,000 administrative expense,$20,000 depreciation expense,$40,000 interest expense,$10,000 purchase of productive equipment,no changes in working capital,and a tax rate of 35%.What is the free cash flow?

• A) $141,000
• B) $168,000
• C) $128,000
• D) $142,000

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

T Critical Value

The value from the t-distribution that is associated with a specified level of significance for a two-tailed test.

Confidence Levels

Confidence levels are the degree of certainty or probability—expressed as a percentage—that a confidence interval contains the true parameter value.

Alternative Hypothesis

The hypothesis in a statistical test that proposes a specific difference or effect, in contrast to the null hypothesis which suggests no effect.