You are trying to estimate the free cash flow to the firm for RevTech, a technology firm.
Fantastic news! We've Found the answer you've been seeking!
Question:
You are trying to estimate the free cash flow to the firm for RevTech, a technology firm. The firm reported $80 million in earnings before interest and taxes, capital expenditures of $30 million, and depreciation of $20 million in the most recent year. There are two additional complications:
- The firm had R&D expenses of $50 million in the most recent year. You believe that a three-year amortizable life is appropriate for this firm and the R&D expenses for the past three years have amounted to $20 million, $30 million, and $40 million respectively.
- The firm also made two acquisitions during the year—a cash-based acquisition for $45 million and a stock-based acquisition for $35 million.
If the firm has no working capital requirements and a tax rate of 40%, estimate the free cash flow to the firm in the most recent year.
Related Book For
Posted Date: