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problem: 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 percent.

Depreciation is the company’s only non-cash expense or revenue.

Determine the company’s net cash flow?

[A]      $570 million

[B]      $450 million

[C]      $500 million

[D]      $850 million

[E]      $650 million

 

Basic Finance, Finance

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