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15 April, 01:08

England Enterprises recently reported operating income of $5.75 million, depreciation of $1.6 million, and had a tax rate of 40%. The firm's expenditures on fixed assets and net operating working capital totaled $1.25 million. How much was its free cash flow, in millions?

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Answers (1)
  1. 15 April, 03:18
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    Free Cash flow is $3.8 million.

    Explanation:

    Free Cash Flows = PBIT + Depreciation - Tax - changes in Working capital

    By putting the values, we have:

    Free Cash Flows = 5.75 + 1.6 - (40% * 5.75) - $1.25 = $3.8 million.

    So the free cash flows available to firm is $3.8 million.
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Home » Business » England Enterprises recently reported operating income of $5.75 million, depreciation of $1.6 million, and had a tax rate of 40%. The firm's expenditures on fixed assets and net operating working capital totaled $1.25 million.
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