Question
Given are the following data for year 1: Revenue = $45 million; Variable cost = $10 million; Fixed cost = $5 million; Depreciation = $1
Given are the following data for year 1:
Revenue = $45 million; Variable cost = $10 million; Fixed cost = $5 million; Depreciation = $1 million; Interest expense = $3 million; Capital expenditure = $12 million; Change in working capital = $2 million. Corporate tax rate is 30%. Calculate the free cash flow to firm (FCFF) for year 1:
| a. | $4.2 million | |
| b. | $6.3 million | |
| c. | $7.3 million | |
| d. | $5.2 million |
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Study Guide To Accompany Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Mark Simonson
1st Edition
0321388682, 9780321388681
