Delta Products recently reported $4,250,000 of sales, $3,200,000 of operating costs other than depreciation, and $250,000 of depreciation. The company had $750,000 of outstanding bonds that carry a 4.25% 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 Delta Products spent $350,000 to buy new fixed assets and to invest $75,000 in net operating working capital. How much free cash flow did Delta Products generate?
Delta Products recently reported $4,250,000 of sales, $3,200,000 of operating costs other than depreciation, and $250,000 of depreciation. The company had $750,000 of outstanding bonds that carry a 4.25% 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 Delta Products spent $350,000 to buy new fixed assets and to invest $75,000 in net operating working capital. How much free cash flow did Delta Products generate?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...
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Delta Products recently reported $4,250,000 of sales, $3,200,000 of operating costs other than |
![6. Delta Products recently reported $4,250,000 of sales, $3,200,000 of operating costs other than depreciation, and $250,000 of
depreciation. The company had $750,000 of outstanding bonds that carry a 4.25% 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 Delta Products spent $350,000 to buy
new fixed assets and to invest $75,000 in net operating working capital. How much free cash flow did Delta Products generate?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a670ca7-8bea-4835-b14f-d42c1bdbe3d1%2Ff0038fd5-af39-404c-beb5-9531625119d2%2F1hem2ya_processed.png&w=3840&q=75)
Transcribed Image Text:6. Delta Products recently reported $4,250,000 of sales, $3,200,000 of operating costs other than depreciation, and $250,000 of
depreciation. The company had $750,000 of outstanding bonds that carry a 4.25% 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 Delta Products spent $350,000 to buy
new fixed assets and to invest $75,000 in net operating working capital. How much free cash flow did Delta Products generate?
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