Cathey Corporation currently has sales of $1,000, which are expected to grow by 10% from Year 0
Question:
Cathey Corporation currently has sales of $1,000, which are expected to grow by 10% from Year 0 to Year 1 and by 4% from Year 1 to Year 2. The company currently has an operating profitability (OP)
ratio of 7% and a capital requirement (CR) ratio of 50% and expects to maintain these ratios at their current levels. The current level of total net operating capital (OpCap) is $510. Use these inputs to forecast free cash flow (FCF) for Years 1 and 2.
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Step by Step Answer:
To calculate the Free Cash Flow FCF for Years 1 and 2 we need to follow these steps 1 Calculate the ...View the full answer
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Related Book For 
Intermediate Financial Management
ISBN: 9781337395083
13th Edition
Authors: Eugene F. Brigham, Phillip R. Daves
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