The EBIT of a firm is $300, the tax rate is 35%, the depreciation is $20, capital expenditures are $60, and the increase in net working capital is $30. What is the free cash flow to the firm?

Name: The EBIT of a firm is $300, the tax rate is 35%, the depreciation is $20, capital expenditures are $60, and the increase in net working capital is $30. What is the free cash flow to the firm?
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Question

Quizplus · Accepted Answer

FCFF = 300(1 − 0.35) + 20 − 60 − 30 = $125 million

The EBIT of a Firm Is $300, the Tax Rate