You have gathered this information on a firm: $500,000 sales, $10,000 cash dividends, $300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense, $40,000 interest expense, $10,000 purchase of productive equipment, no changes in working capital, and a tax rate of 21%. What is the free cash flow

Free Cash flow                                               $144,800    

Explanation:

The question is to determine the free cash flow for the firm

This is done as follows

First we calculate the earnings before interest and tax (EBIT)

EBIT = Sales - Cost of Goods sold - Administrative expenses - Depreciation expenses

= $500000 - $300,000 - $20,000 - $20,000 = $160,000

Secondly, we calculate the Taxes by subtracting the interest from the EBIT and then finding 21% tax rate

= $160,000 - $40,000= $120,000 x 0.21  = $25,200

So, Free Cash Flow

EBIT                                                             $160,000

Less: Taxes                                                    25,200

Net incomes before Interest                      $134,800

Add: Depreciation                                         $20,000

Less: Capital expenditure (equipment)      ($10,000)

No changes in Net Working Capital            (0)

Free Cash flow                                               $144,800        

answer; ///(d); determining who competes most closely   with whom evaluating whether industry driving forces and competitive pressure favor some strategic groups and hurt others, and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each groups respective market positions;

answer; monopolistic competition;