Posted: February 8th, 2016
Li Retailing reported the following items for the current year: Sales = $2,000,000; Cost of Goods Sold = $1,200,000; Depreciation Expense = $140,000; Administrative Expenses = $170,000; Interest Expense = $40,000; Marketing Expenses = $60,000; and Taxes = $20,000. In addition, Li’s current assets increased by $400,000, accounts payable increased by $300,000, 4% notes payable increased by $100,000, and gross fixed assets increased by $250,000. Li’s free cash flow is equal to ________.
a. $300,000
b. $200,000
c. $100,000
d. $50,000
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