If XYZ has no excess cash and has a corporate tax rate of 25%,what is the free cash flow to the firm?
A)$1.09 million
B)$1 million
C)$1.59 million
D)$1.11 million
E)$1.21 million

Name: If XYZ has no excess cash and has a corporate tax rate of 25%,what is the free cash flow to the firm? A)$1.09 million B)$1 million C)$1.59 million D)$1.11 million E)$1.21 million
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Question

Quizplus · Accepted Answer

Free cash flow to the firm = EBIT * (1 - Tax rate) = $1.5 million * (1 - 0.25) = $1.125 million

If XYZ Has No Excess Cash and Has a Corporate