Question: Below is a pro forma income statement for the next year (year 1). Everything is in million $. Year 1 Revenue 120 Cost 70 EBITDA
Below is a pro forma income statement for the next year (year 1). Everything is in million $.
| Year 1 | |
| Revenue | 120 |
| Cost | 70 |
| EBITDA | 50 |
| Depreciation | 20 |
| EBIT | 30 |
| Interest Expense | 5 |
| Pre-Tax Income | 25 |
| Income tax | 5 |
| Net Income | 20 |
The company will not have any capital expenditures in year 1, but it will increase the level of NWC from $10 million (in year 0 ) to $13.1 million in year 1. The corporate tax rate is 20%.
What is the free cash flow in year 1? Write your answer in million dollars with 1 digit after the decimal point. For example, if the answer is $3.2 million, just write 3.2.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
