1. In the current year, a company paid interest of $40,000, had net capital expenditures of $300,000, and reduced outstanding debt by $75,000. In addition, the company reported cash flow from operating activities of $600,000, cash flow from investing activities of ($250,000), and cash flow from financing activities of $65,000. The marginal tax rate is 35%. Compute the free cash flow to equity holders.
$375,000
$340,000
$326,000
$225,000
2. Current year sales are $850,000, and total expenses are $812,000. If sales are forecasted to increase 11% next year, and all expenses vary proportionally with sales, what is forecasted net income next year?
A) $38,000
B) $42,180
C) $901,320
D) $943,500