Question:Johnson Manufacturing recently reported $7,250,000 of sales, $1,875,000 of operating costsother than depreciation, and $1,150,000 of depreciation. The company had $200,000 ofoutstanding bonds that carry a 6.00% interest rate, and its federal-plus-state income tax rate was30%. In order to sustain its operations and thus generate future sales and cash flows, the firmwas required to spend $350,000 to buy new fixed assets and to invest $150,000 in net operatingworking capital.What was the firm's free cash flow?

EBIT=Sales−Operating Costs−DepreciationEBIT=7,250,000−1,875,000−1,150,000=4,225,000 Interest…

Answered: Question: Johnson Manufacturing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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