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Pioli Corporation recently reported $10,750 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds that carry a 5.75% interest rate, and its federal-plus-state income tax rate was 45%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,560. These expenditures were necessary for it to sustain operations and generate future sales and cash flows. What was its free cash flow?

Pioli Corporation recently reported $10,750 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds that carry a 5.75% interest rate, and its federal-plus-state income tax rate was 45%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,560. These expenditures were necessary for it to sustain operations and generate future sales and cash flows. What was its free cash flow?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Problem 2 Pioli Corporation recently reported $10,750 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds that carry a 5.75% interest rate, and its federal-plus-state income tax rate was 45%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,560. These expenditures were necessary for it to sustain operations and generate future sales and cash flows. What was its free cash flow?
Transcribed Image Text:Problem 2 Pioli Corporation recently reported $10,750 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds that carry a 5.75% interest rate, and its federal-plus-state income tax rate was 45%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,560. These expenditures were necessary for it to sustain operations and generate future sales and cash flows. What was its free cash flow?
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