Use the information for the question(s)below.
Epiphany Industries is considering a new capital budgeting project that will last for three years.Epiphany plans on using a cost of capital of 12% to evaluate this project.Based on extensive research,it has prepared the following incremental cash flow projections:
-The free cash flow for the last year of Epiphany's project is closest to:
A)$55,800.
B)$38,000.
C)$35,000.
D)$43,000.

Question

Use the information for the question(s)below.
Epiphany Industries is considering a new capital budgeting project that will last for three years.Epiphany plans on using a cost of capital of 12% to evaluate this project.Based on extensive research,it has prepared the following incremental cash flow projections: 
-The free cash flow for the last year of Epiphany's project is closest to:
A)$55,800. 
B)$38,000. 
C)$35,000. 
D)$43,000.

Quizplus · Accepted Answer

The free cash flow is calculated as operating cash flow minus capital expenditures. The closest value to the calculated free cash flow for Epiphany's project is $55,800.

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