Question: Wells Water Systems recently reported $ 9 , 2 5 0 of sales, $ 4 , 5 0 0 of operating costs other than depreciation,

Wells Water Systems recently reported $9,250 of sales, $4,500 of operating costs other than depreciation, and $950 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to spend $750 to buy new fixed assets and to invest $250 in net operating working capital. How much free cash flow did Wells generate?
Select the correct answer.
a. $2,792.90
b. $2,800.00
c. $2,785.80
d. $2,814.20
e. $2,807.10

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