Expected Operating Cash Flow = 25m Expected Free Cash Flow to the Firm = 20m Expected Sustainable
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Question:
Expected Free Cash Flow to the Firm = 20m
Expected Sustainable Growth Rate = 3%
The management of this company has proposed implementing a set of operational improvements that will sustainably increase both operating cash flow and free cash flow by 1m per year at a cost of $15m today.
Will this decision create or destroy value to the firm? Discuss
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
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