Bubba Ho-Tep Company reported net income of $290 million for the most recent fiscal year. The firm had depreciation expenses of $100 million and capital expenditures of $150 million. Although it had no interest expense, the firm did have an increase in net working capital of $30 million. What is Bubba Ho-Tep's free cash flow?
A) $10 million
B) $210 million
C) $270 million
D) $570 million

Question

Quizplus · Accepted Answer

B) FCF = NI + Dep - Capital Ex - inc. in NWC
= $290 million + $100 million - $150 million - $30 million = $210 million

Bubba Ho-Tep Company Reported Net Income of $290 Million for the Most