Watson Oil Recently Reported (In Millions)$8,250 of Sales,$5,750 of Operating

Watson Oil recently reported (in millions) $8,250 of sales,$5,750 of operating costs other than depreciation,and $650 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 35%.In order to sustain its operations and thus generate future sales and cash flows,the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital.By how much did the firm's net income exceed its free cash flow?

A) $718
B) $756
C) $796
D) $836
E) $878