Provo Corporation had cash revenues of $13 000 000 cash operating expenses of $5 000 000 and depreciation and amortization of $1 000 000 during 2015. The firm purchased $600 000 of equipment during the year while increasing its inventory by $300 000 (with no corresponding increase in current liabilities). The corporate income tax rate for Provo is 40 percent. What is Provo’s free cash flow for 2015?
