Given the following data for a given period, compute the free cash flow to the firm: Net Income = $5,000
After-tax Interest Expense = $500
Depreciation = $500
Increase in NWC = $1,000
Capital Expenditures = $2,000
A) $3,000
B) $3,500
C) $3,700
D) $3,900

Question

Quizplus · Accepted Answer

A) Free cash flow = Net income + After-tax interest expense + Depreciation - Change in NWC - Capital expenditures
Free cash flow = 5,000 + 500 + 500 - 1,000 - 2,000 = $3,000

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