In Problem 3- 14, you were asked to prepare a statement of cash flows for Pamplin Inc. Pamplin€™s financial statements are provided again below. Using this information, compute the firm€™s free cash flows and the financing cash flows, and interpret your results.

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Pamplin Inc. Balance Sheet at 12/31/2011 and 12/31/2012 ASSETS 2011 2012 Cash Accounts receivable Inventory Current assets Plant and equipment $ 200 450 550 1,200 $2,200 (1,000) $1,200 $2,400 $150 425 625 1,200 $2,600 (1,200) $1,400 $2,600 Less accumulated depreclation Net plant and equipment Total assets LIABILITIES AND OWNERS EQUITY 2011 2012 150 150 $ 300 600 Accounts payable Notes payable-current (9%) Current llabilities Bonds Owners' equity Common stock Retalned earnings Total owners' equity Total labilities and owners' equity S 200 S 200 600 s 900 700 $1,600 $2,400 900 800 $1,700 $2,600 Pamplin Inc. Income Statement for Years Ended 12/31/2011 and 12/31/2012 2011 2012 $1.450 850 600 Sales Cost of goods sold Gross profit Selling, general, and administrative expenses Depreclation Operating Income Interest expense Net Income before taxes Taxes (40%) Net income 1,200 700 $ 500 250 250 $ 50 S 200 80 S 120 240 360 64 296 118 S 178 220 200