A company has EBIT of $30 million, depreciation of $5 million, and a 40% tax rate. It
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A company has EBIT of $30 million, depreciation of $5 million, and a 40% tax rate. It needs to spend $15 million on new fixed assets and $5 million to increase its current assets. It expects its accounts payable to decrease by $2 million, its accruals to increase by $3 million, and its notes payable to increase by $8 million. The firm’s current liabilities consist of only accounts payable, accruals, and notes payable. What is its free cash flow?
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