4. Veazy Plumbing recently reported $8,250 of sales, $4,500 of operating costs other than depreciation,...
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4. Veazy Plumbing 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 federal-plus-state income tax rate was 35%. In order to sustain its operations, 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 Veazy generate?
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