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Free Cash Flow (20 points) A company has an EBIT of P30,000,000, depreciation of P5,000,000, and a 40% tax rate. It needs to spend P10,000,000
Free Cash Flow (20 points)
A company has an EBIT of P30,000,000, depreciation of P5,000,000, and a 40% tax rate. It needs to spend P10,000,000 on new fixed assets and P15,000,000 to increase its current assets. It expects its accounts payable to increase by P2,000,000, its accruals to increase by P3,000,000, and its notes payable to increase by P8,000,000. The firms current liabilities consist of only accounts payable, accruals, and notes payable. What is the companys free cash flow?
Please compute and solve the problem. Thank you
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