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ABC Company has operating income (EBIT) of $1,250,000. Its depreciation expense is $300,000, and it has no amortization expense. The company is 100% equity financed
ABC Company has operating income (EBIT) of $1,250,000. Its depreciation expense is $300,000, and it has no amortization expense. The company is 100% equity financed (that is, its interest expense is zero). The company has a 40% tax rate, and its net investment in operating capital is $500,000. How much is the difference between the firm's net cash flow and operating cash flow?
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