Question
A company has the following data: Net income: $200,000 Depreciation and amortization: $50,000 Increase in accounts receivable: $10,000 Increase in accounts payable: $5,000 Capital expenditures:
A company has the following data:
- Net income: $200,000
- Depreciation and amortization: $50,000
- Increase in accounts receivable: $10,000
- Increase in accounts payable: $5,000
- Capital expenditures: $30,000
- Dividends paid: $40,000
- Tax rate: 30%
Calculate the company's free cash flow and use it to determine the company's value using the discounted cash flow (DCF) method. Assume a discount rate of 10%.
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
16th edition
0077664078, 978-0077664077, 78111048, 978-0078111044
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