. You are trying to estimate the free cash flow to the firm on January 1, 2010,...
Question:
. You are trying to estimate the free cash flow to the firm on January 1, 2010, for a software company and have been provided with the following information for 2009 (all numbers in millions):
You are also given the following information:
a. The firm invested $180 million in property, plant and equipment in 2009.
b. The firm’s R&D generally takes an average of 4 years to pay off; its R&D expenses were $40 million in 2005, $80 million in 2006, $ 120 million in 2007 and $ 160 million in 2008.
c. Total working capital (including cash) increased by $ 10 million last year but the cash balance decreased by $ 20 million. The firm has no short-?term debt.
Estimate the free cash flow to the firm in 2009.
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton