Watson Oil recently reported (in millions) $8,250 of sales, $5,900 of operating costs other than depreciation, and $600 of depreciation. The company had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $1,350 of capital expenditures on new fixed assets and to invest $350 in net operating working capital. By how much did the firm's net income exceed its free cash flow?
a. $542.50 million b. $630.00 million c. $702.50 million d. $370.00 million e. $980.00 million