Bartling Energy Systems Recently Reported $9, 250 of Sales, $5

question 41

Multiple Choice

Bartling Energy Systems recently reported $9, 250 of sales, $5, 750 of operating costs other than depreciation, and $700 of depreciation.The company had no amortization charges, it had $3, 200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%.In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1, 250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital.By how much did the firm's net income exceed its free cash flow?

• A) $673.27
• B) $708.70
• C) $746.00
• D) $783.30
• E) $822.47

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Definitions:

Shares

Shares represent an ownership stake in a company or financial asset, distributing profits equally through dividends if any are declared.

Earnings Per Share

A measure of a company's profitability calculated as net income divided by the number of outstanding shares of its common stock.

Treasury Shares

Shares of a company's own stock that it has repurchased and are held in the company's treasury.

Treasury Stock

Stocks that a company originally issued and then bought back, which decreases the number of shares available for trade in the market.