MC$\mathrm{.}16\mathrm{.}124.$Algo

$1$ Question $35$ of $42$

Madura Inc. wants to increase its free cash flow by $$190$ million during the coming year, which should result in a higher EVA and stoc price. The CFO has made these projections for the upcoming year:

EBIT is projected to equal $$700$ million.

Gross capital expenditures are expected to total to $$280$ million versus depreciation of $$120$ million, so its net capital expenditures should total $$160$ million.

The tax rate is $40\%.$

There will be no changes in cash or marketable securities$,$ nor will there be any changes in notes payable or accruals.

What increase in net operating working capital $($in millions of dollars$)$ would enable the firm to meet its target increase in FCF$?$

a$.$ $$260$ million

b$.$ $$110$ million

c$.$ $$70$ million

d$.$ $$62$ million

e$.$ $$330$ million

Search