Answer:
Free cash for first year is $98.75
Explanation:
Sales = Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $250 million
Less: Costs = Â Â Â Â Â Â Â Â Â Â Â Â $125 million
Less: Depreciation = Â Â Â Â Â Â $50 million
Earning before Tax = Â Â Â Â Â $75 million
Less: Tax 35% (75 x 35%) = $26.25 million
Net Income = Â Â Â Â Â Â Â Â Â Â Â Â $ 48.75 million
Free cash flow = Net Income + Non cash Expenses - Increase in working capital - Capital Expenditure
Free cash flow = 48.75 million + 50 million - 0 - 0
Free cash flow = 98.75 million