Help Save & Exit Eagle Products' EBIT is $620, its tax rate is 30%, depreciation is $35, capital expenditures are $75, and the planned increase in net working capital is $42. What is the free cash flow to the firm? Free cash flow You have the following information about two firms, Debt Free, Inc. and Debt Spree, Inc. Both firms have the same prospects for sales and EBIT, and both have the same level of assets, tax rate and borrowing rate. They differ in their use of debt financing Scenario Bad year Normal year Good year Sales EBIT 200 12 275 38 380 46 250 Total assets Tax rate Debt Equity Torrowing rate Debt Tree Debt Spree 250 35 35 0 150 100 16 16 250 Calculate the interest expense for each firm: Interest expense for Debt Free $ 000 Interest expense for Debt Spree $ 2400 Calculate the following items for each firm for each scenario (bad year, normal year, good year: return on assets (ROA), net profit, and Dros 2 of 2 Debt Free Debt Spree Total assets 250 250 Tax rate 35 35 Debt 0 150 Equity 250 100 Borrowing rate 168 16 % Calculate the interest expense for each firm: Interest expense for Debt Free $ 0.00 Interest expense for Debt Spree 2400 Calculate the following items for each firm for each scenario (bad year, normal year, good year); return on assets (ROA), net return on equity (ROE). (Use a minus sign to indicate negative answers. Round your answers to 2 decimal places.) Scenario ROA ROE ROA Debt Free Net Profit 780 2470 29.00 Bad year Normal year Good year ROE 3.12 9.880 11960 Debt Spree Net Profit (780) 910 1430 780 9.101 1430