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