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Last year, your company had revenue of $27.5 million, cost of goods sold (COGS) of $14.0 million, cost of sales, general and administrative (SG&A) of

Last year, your company had revenue of $27.5 million, cost of goods sold (COGS) of $14.0 million, cost of sales, general and administrative (SG&A) of $2.5 million, accounts receivable (AR) of $8.5 million, Accounts Payable (AP) of $7.0 million and Inventory of $5.5 million. What will free cash flow be this year if you increase revenue by 3.5% and AR by 14.5%, while keeping COGS growth at 3.0% and all else being equal? last year? Assume there are no taxes and no new capital expenditures.

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ANSWER To calculate the free cash flow for the current year we need to start with the formula for free cash flow Free Cash Flow Operating Cash Flow Ca... blur-text-image

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