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Suppose you are the only owner of a chain of coffee shops near universities. Your current caf s are doing well, but you are interested
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 finedining 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
Your existing business generates $ in EBIT.
The corporate tax rate applicable to your business is
The depreciation expense reported in the financial statements is $
You don't need to spend any money for new equipment in your existing cafs; however, you do need $ of additional cash.
You also need to purchase $ in additional suppliessuch as tableclothes and napkins, and more formal tablewareon credit.
It is also estimated that your accruals, including taxes and wages payable, will increase by $
Based on your evaluation, you have in free cash flow. ncluding distributing it to stockholders and debtholders. Which of the following is not a use of free
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