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:

Price

The monetary total projected, essential, or disbursed as payment for an item.

Equilibrium Price

The price in the market where the amount of goods available matches the amount of goods people want to buy.

Supply

The aggregate quantity of a product or service that can be bought at a specific price point within a particular market.

Demand

The quantity of a product or service that consumers are willing and able to purchase at a given price.