Dino Drilling recently reported $8,250 of sales, $4,500 of operating costs other than depreciation, and $950 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and its combined federal and provincial 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 spend $750 to buy new fixed assets and to invest $250 in net operating working capital. How much free cash flow did Dino Drilling generate? Oa. $1,770.00 Ob. $1,858.50 OC. $2,049.00 Od. $1,951.43

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Dino Drilling recently reported $8,250 of sales, $4,500 of operating costs other than depreciation, and $950 of depreciation.
The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and its
combined federal and provincial 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 spend $750 to buy new fixed assets and to invest $250 in net operating
working capital. How much free cash flow did Dino Drilling generate?
Oa. $1,770.00
Ob. $1,858.50
OC. $2,049.00
Od. $1,951.43
Transcribed Image Text:Dino Drilling recently reported $8,250 of sales, $4,500 of operating costs other than depreciation, and $950 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and its combined federal and provincial 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 spend $750 to buy new fixed assets and to invest $250 in net operating working capital. How much free cash flow did Dino Drilling generate? Oa. $1,770.00 Ob. $1,858.50 OC. $2,049.00 Od. $1,951.43
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