Consider the following data with regards to free cash flow (FCF): Revenue = $100,000 Cash...

 

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Consider the following data with regards to free cash flow (FCF): Revenue = $100,000 • Cash operating expenses = $93,500 ● Depreciation expense = $1,000 • Effective tax rate = 25% • Incremental investment in operating net working capital - $50 • Incremental investment in long-term operating assets - $4,000 If depreciation expense was to increase by 10% but everything else remains as shown above, how much would free cash flow change? Assume no other factors change. Consider the following data with regards to free cash flow (FCF): Revenue = $100,000 • Cash operating expenses = $93,500 ● Depreciation expense = $1,000 • Effective tax rate = 25% • Incremental investment in operating net working capital - $50 • Incremental investment in long-term operating assets - $4,000 If depreciation expense was to increase by 10% but everything else remains as shown above, how much would free cash flow change? Assume no other factors change.

Answer rating: 100% (QA)

Free Cash Flow FCF can be calculated using the following formula FCF Revenue Cash Operating Expen... View the full answer