Question: Help me with these study guide questions please Payless Co. considers buying a spectrometer for $10,000. The expectation is that the spectrometer will reduce before-tax
Payless Co. considers buying a spectrometer for $10,000. The expectation is that the spectrometer will reduce before-tax operating costs (excluding depreciation) by $3,000 per year over a 5-year period. Assuming straight line depreciation to a zero book value and 34% tax rate, compute the OCF for the first year. 6. a. -$1,300 b. -$1,000 $680 d. $2,660 $5,000 C. e. Which of the following best describes free cash flow? 7. Free cash flow is the amount of cash flow available for distribution to all investors after all necessary investments in operating capital have been made. b. a. Free cash flow is the amount of cash flow available for distribution to shareholders after all necessary investments in operating capital have been made. Free cash flow is the net change in the cash account on the balance sheet. Free cash flow is equal to net income plus depreciation. Free cash flow is equal to the cash flow from non-taxable transactions. C. d. e
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
