Given the following data for a given period,compute the free cash flow to the firm: Net Income = $10,000
After-tax Interest Expense = $1000
Depreciation = $1000
Increase in NWC = $1000
Capital Expenditures = $2000
A)$9000
B)$9500
C)$9700
D)$9900
E)$10,500

Question

Quizplus · Accepted Answer

Free Cash Flow to the Firm (FCFF) is calculated as Net Income + After-tax Interest Expense + Depreciation - Increase in NWC - Capital Expenditures. Plugging in the given values: $10,000 + $1,000 + $1,000 - $1,000 - $2,000 = $9,000.

Given the Following Data for a Given Period,compute the Free