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ELLEN consulting is back, and this time you have been tasked with reviewing the free cash flow to the firm computation made by an analyst
ELLEN consulting is back, and this time you have been tasked with reviewing the free cash flow to the firm computation made by an analyst for TRGA a company that has been flourishing this year. Below are the analyst's computations.
Estimate the correct free cash flow to the firm
Revenue Last year (in millions) Notes 1.200,00 kr Includes 100 million kr in operating lease expenses. The firm has 80 million kr in lease commitments each year for the next 5 years 600,00 kr and a pre-tax cost of debt of 5%. 600,00 kr 150,00 kr Operating Expenses Operating Income - Interest Expenses Taxable income - Taxes Net Income + Depreciation 450,00 kr 157,50 kr Paid marginal tax rate on taxable income 292,50 kr 100,00 kr Did not include stock based acquisition of 50 200,00 kr million kr - Cap Ex - Change in Working Capital Free cash flow to firm Includes an increase in the cash balance of 10 50,00 kr million kr 142,50 krStep by Step Solution
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