Question

In: Finance

This​ year, FCF Inc. has earnings before interest and taxes of ​$9,420,000​, depreciation expenses of ​$1,400,000​,...

This​ year, FCF Inc. has earnings before interest and taxes of

​$9,420,000​,

depreciation expenses of

​$1,400,000​,

capital expenditures of

$1,500,000​,

and has increased its net working capital by

$475,000.

If its tax rate is

38%​,

what is its free cash​ flow?


Round to to 2 decimals

Solutions

Expert Solution

Answer:
Calculation of free cash flow
Particular Amount (in Dollar)
EBIT                     9,420,000.00
Less : Interest Expense                                          -  
EBT                     9,420,000.00
Less : Tax @38%                     3,579,600.00
Earning after tax                     5,840,400.00
Add: Depreciation expense                     1,400,000.00
Cash flow from operation                     7,240,400.00
Less: Capital Expenditure                     1,500,000.00
Less: Increase in net working capital                        475,000.00
Free cash flow                     5,265,400.00
So, Free cash flow is $5,265,400 (Answer)

jeff jeffy answered 2 years ago
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