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

question 61

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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?

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Definitions:

Returns to Scale

The rate at which production output increases as a result of a proportional increase in all inputs.

Isoquants

Curves that represent combinations of different inputs that yield the same output, used in production theory to analyze input choices.

Inputs

The resources used in the production process to produce goods or services, including labor, materials, and capital.

Production Function

An equation that describes the relationship between inputs (like labor and capital) and the quantity of output produced.

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