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Texas Instrument is considering a potential project. It requires an initial investment of $10 mil and...

Texas Instrument is considering a potential project. It requires an initial investment of $10 mil and is expected to last 4 years. Revenues and costs at the end of the first year are expected to be $6 mil and $2 mil, respectively. Both are expected to stay constant for the life of the project. The firm uses straight line depreciation and has 0 remaining value at the end. The working capital levels in years 1 to 4 are: $0.5 mil, $1 mil, $1.5 mil, and 0, respectively. Assume a tax rate of 35%. Calculate the free cash flow to firm (FCFF) in each of the 4 years (year 1 to year 4).

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jeff jeffy answered 1 year ago
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