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Suppose you are the only owner of a chain of coffee shops near universities. Your current cafs are doing well, but you are interested in

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Suppose you are the only owner of a chain of coffee shops near universities. Your current cafs are doing well, but you are interested in starting a fine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financial performance: Financial update as of June 15 - Your existing business generates $75,000 in EBrT. - The corporate tax rate applicable to your business is 25%. - The depreciation expense reported in the financial statements is $14,286. - You don't need to spend any money for new equipment in your existing cafs; however, you do need $11,250 of additional cash. - You also need to purchase $6,000 in additional supplles-such as tableclothes and napkins, and more formal tableware-on credit. - It is also estimated that your accruals, including taxes and wages payable, will increase by $3,750. Based on your evaluation you have in free cash flow. Can a company have negative free cash flow? No Yes

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