Question 7

Part A: What ARE(Multiple Answer) considered initial costs in the FCF0( free cash flow for year 0)? MULTIPLE ANSWERS MAY BE CORRECT CHOOSE ALL THAT APPLY

a. Net operating working capital (NOWC)

b. Change in Net operating working capital

c. Capital expenditure

d. Operating cash flow

e. Terminal costs

Part B: What ARE considered in FCFt (the final years free cash flow)? MULTIPLE ANSWERS MAY BE CORRECT CHOOSE ALL THAT APPLY

a. Recovery of NOWC in year 0

b. Recovery of change in NOWC in year 0

c. Capital expenditure

d. Operating Cash flow

e. After tax Salvage value