Use the financial statements and additional data provided by management to calculate the firm's Free Cash Flow for the projected year.

Tax rate = 25%

Plans for the projected year will require $1,000 of new machinery and equipment

Firm expects next year's dividend to be $260

Acme Products, Inc. Acme Products, Inc. Balance Sheets Income Statement ASSETS current yr projected yr projected yr Cash 400 500 Sales (all credit) 7,500 Receivables 600 750 Cost of Goods Sold 4,500 Inventory 900 1,125 Gross Profit 3,000 Property, plant & equipment 2,200 2,750 Operating expenses 400 Total assets 4,100 5,125 Depreciation 500 Operating income 2,100 LIABILITIES & EQUITY Interest expense 100 Accounts payables 500 625 Taxable income 2,000 Accrued expenses 400 500 Taxes (25%) 500 Long-term debt 1,400 1,750 Net income 1,500 Common stock 600 750 Paid-in Capital 200 250 Retained earnings 1,000 1,250 Total liabilities and equity 4,100 5,125