Computation of net cash flow.
An analyst has collected the following information for Gilligan Grocers:
• Earnings before interest and taxes (EBIT) = $700 million.
• Earnings before interest, taxes, depreciation and amortization (EBITDA) = $850 million.
• Interest expense = $200 million.
• The corporate tax rate is 40%.
• Depreciation is the company's only non-cash expense or revenue.
What is the company's net cash flow?
a) $850 million
b) $650 million
c) $570 million
d) $450 million
e) $500 million