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In the annual reports of the most recent fiscal year, Blue Mountain Corp. reported net income...

In the annual reports of the most recent fiscal year, Blue Mountain Corp. reported net income of $250 million. The beginning balance and ending balance of accumulated depreciation account are $200 million and $275 million respectively. Also, the firm had capital expenditures of $65 million and an increase in net working capital of $35 million. The firm has no debt outstanding. What is the firm’s free cash flow? $175 million $225 million $250 million $275 million

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Answer #1

Answer is 225 million

Particulars Amount
Net income                     250.00
Add: depreciation                       75.00
Less: capital expenditure                     (65.00)
Less: increase in working capital                     (35.00)
Free cash flow                     225.00
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