TSW Inc. had the following data for last year: Net income = $800; Net operating profit...

TSW Inc. had the following data for last year: Net income = $800; Net operating profit after taxes (NOPAT) = $700; Total assets = $3,000; and Total operating capital = $2,000. Information for the just-completed year is as follows: Net income = $1,000; Net operating profit after taxes (NOPAT) = $925; Total assets = $2,600; and Total operating capital = $2,500. How much free cash flow did the firm generate during the just-completed year?

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Expert Solution

FREE CASH FLOW = NOPAT - INCREASE OPERATING CAPITAL

FREE CASH FLOW = 925 - (2500-2000) = 925 - 500 = 425

ANSWER : 425

jeff jeffy answered 2 years ago

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