Question
You have obtained the following estimates for Armadillo Appliances. Next year's EBIT is expected to be $10 million. The firm is expected to spend $2
You have obtained the following estimates for Armadillo Appliances. Next year's EBIT is expected to be $10 million. The firm is expected to spend $2 million on capital expenditures. Current assets are expected to increase by $10 million relative to last year, while current liabilities are expected to increase by $11 million relative to last year. Interest expense is expected to be $3 million, and the firm's depreciation and amortization expense is expected to be $1 million. The tax rate is 20%. The firm's expected free cash flow next year is $5 million. True or False?
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