Answer:
$970
Step-by-step explanation:
The computation of the free cash flow is shown below:
As we know that
Free cash flow is
= EBIT (1 - tax rate) + depreciation expense - capital expenditure - net working capital
where
EBIT is
Sales $9,250.00
Less: Operating costs excluding depreciation $5,750.00
Less: Depreciation $700.00
Operating income (EBIT) $2,800.00
Now the free cash flow is
= $2,800 × (1 - 0.35) + $700 - $1,250 - $300
= $1,820 + $700 - $1,250 - $300
= $970