The free cash flow to the firm in 2008 is closest to:
A)-5005
B)-1755
C)5575
D)14,995

Name: The free cash flow to the firm in 2008 is closest to: A)-5005 B)-1755 C)5575 D)14,995
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Question

Quizplus · Accepted Answer

A)After-Tax interest expense = interest expense(1 - T_c)= 6800(1 - .35)= 4420 Note T_c = income tax/pre-tax income = 3748/10,708 = 35% FCF_firm = NI + after tax interest + Depreciation - ΔNWC - capital expenditures FCF_firm = 6960 + 4420 + 6865 - 3250 - 20,000 = -5005

The Free Cash Flow to the Firm in 2008 Is