Sprint Communications recently reported operating income of$50.0 million, depreciation and amortization of $13.0 million, and...

Sprint Communications recently reported operating income of $50.0 million, depreciation and amortization of $13.0 million, and had a tax rate of 30%. The company's capital expenditures were $42.5 million and net operating working capital was $10.5 million. How much was Sprint's free cash flow in millions?

Expert Solution

Free Cash flow from Firm = Operating Income*(1-tax Rate) + Depreciation and amortization - Change in Net operating Working Capital - Net Capital Expenditure

= $50 million*(1-0.30) + $13 million - $10.5 million - $42.5 million

= - $5 millions

So, Sprint's free cash flow is -$5 millions

jeff jeffy answered 2 years ago

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