Beckham Broadcasting Company [BBC] has operating income [EBIT] of $2,500,000. The company’s depreciation expense is USD 500,000 and it has no amortization expense. The company is 100 percent equity financed. The company has a 40 percent tax rate, and its net investment in operating capital is $1,000,000.9 determine BBC’s free cash flow?
[A] $0
[B] $1,000,000
[C] $1,500,000
[D] $500,000
[E] $900,000