Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Last year Harrington Inc. had $6 million in operating income (EBIT). Its depreciation expense was $1.5 million and its interest expense was $1.25 million. Its

Last year Harrington Inc. had $6 million in operating income (EBIT). Its depreciation expense was $1.5 million and its interest expense was $1.25 million. Its corporate tax rate is 25%. Harrington had $13 million in operating current assets, $3 million in accounts payable, $2 million in accruals, and $1 million in notes payable at year's end. In addition, it had $12 million in net plant and equipment and no excess cash. The prior year, Harrington had $10 million in net plant and equipment and its net operating working capital requirement was $7 million. Given the information provide, what was Harrington's free cash flows (FCF) from the year that just ended? (Hint: Use your answer from previous questions as needed). Enter your answer without using the $ sign and using the format 1,000,000 instead of 1 million. Round to the nearest $.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Financial Management

Authors: Eugene BrighamPhillip Daves

1st Edition

0324594712, 9780324594713

More Books

Students also viewed these Finance questions

Question

12.6 Analyze the emerging emphasis on employee recognition.

Answered: 1 week ago