During the year, the XYZ Company paid $300,000 in interest. The company is in the 25% tax bracket. It paid off $175,000 in notes payable and issued an additional $400,000 in long-term debt. The firm paid $125,000 in dividends and bought back $100,000 in common stock. It also increased its short-term investments by $60,000. Based on the information above, calculate the FCF for XYZ Company. O $1,072,500 O $285,000 O $1,085,000 $260,000

During the year, the XYZ Company paid $300,000 in interest. The company is in the 25% tax bracket. It paid off $175,000 in notes payable and issued an additional $400,000 in long-term debt. The firm paid $125,000 in dividends and bought back $100,000 in common stock. It also increased its short-term investments by $60,000. Based on the information above, calculate the FCF for XYZ Company. O $1,072,500 O $285,000 O $1,085,000 $260,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 2P

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

During the year, the XYZ Company paid $300,000 in interest. The company
is in the 25% tax bracket. It paid off $175,000 in notes payable and issued
an additional $400,000 in long-term debt. The firm paid $125,000 in
dividends and bought back $100,000 in common stock. It also increased its
short-term investments by $60,000.
Based on the information above, calculate the FCF for XYZ Company.
O $1,072,500
$285,000
O $1,085,000
O $260,000

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