Question: 4.5 points: Cash flow from assets (CFFA) is also known as Free cash flow (FCF). CFFA (or FCF) is calculated by adding Net Income to
4.5 points: Cash flow from assets (CFFA) is also known as "Free cash flow" (FCF). CFFA (or FCF) is calculated by adding Net Income to Depreciation and Interest Expense, then subtracting capital expenditures for the period, and then subtracting any increases in net working capital required to keep the operation running and growing in accord with plans. NOW SUPPOSE that your business had 29,000 in Net Income; 1,700 in Depreciation Expense; 1,900 in Capital Expenditures; 5,500 in Interest Expense; and your Net Working Capital account was stable (NO CHANGE) across the period. FIND: CFFA 5.5 points: Net Income one period was 20. That same period, Dividends was recorded at 15. In this case, what must have been the amount Added to Retained Earnings (from reinvestment)? 6.5 points: A firm borrowed an additional 10,000 one period. During that same period, it also retired 1,500 of principal off of an existing loan, which occurred through scheduled payments. In the course of making those payments, the firm paid 3,500 in interest. FIND: Cash Flow to Creditors
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