As a summer intern, you are asked to prepare a spreadsheet calculating the project free cash flow
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a. You need to go back to your office and adjust the project’s free cash flows to include the interest on the debt.
b. You need to go back to your office and adjust the project cash flows to update the taxes paid due to the tax shield provided by taking on debt.
c. Your cash flow model does not need to be updated because the financing of the project does not affect the free cash flow calculation. Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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Related Book For
Valuation The Art and Science of Corporate Investment Decisions
ISBN: 978-0133479522
3rd edition
Authors: Sheridan Titman, John D. Martin
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