Use the information from the statement of cash flows given in Exhibit 5 to calculate FCFF for
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Use the information from the statement of cash flows given in Exhibit 5 to calculate FCFF for the three years 2010−2012. The tax rate (as given in Exhibit 1) is 30 percent.
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EXHIBIT 5 Cane Distribution, Inc. Statement of Cash Flows: Indirect Method (in Thousands) Years Ending 31 December 2010 2011 2012 Cash flow from operations Net income $97.52 $107.28 $118.00 Plus: Depreciation 45.00 49.50 54.45 Increase in accounts receivable (100.00) (10.00) (11.00) Increase in inventory (6.00) (6.60) (7.26) Increase in accounts payable 50.00 5.00 5.50 Cash flow from operations 86.52 145.18 159.69 Cash flow from investing activities Purchases of PP&E 0.00 (50.00) (55.00) Cash flow from financing activities Borrowing (repayment) 22.40 24.64 27.10 Total cash flow 108.92 119.82 131.80 Beginning cash 0.00 108.92 228.74 Ending cash $108.92 $228.74 $360.54 Notes: Cash paid for interest ($15.68) ($17.25) ($18.97) Cash paid for taxes ($41.80) ($45.98) ($50.57)
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