Answer:
A.) $81,100,000
B.) $64,000,000
C.) $17,100,000
Explanation:
EBIT = $90 million
Tax rate = 21%
Depreciation = $10 million
gross fixed assets increased by $56 million
current assets increased by $44 million
current liabilities increased by $36 million
A.) Operating Cash flow for 2021
EBIT + Depreciation - (EBIT × Tax rate)
$90, 000,000 + 10,000,000 - (90,000,000×0.21)
100,000,000 - (18,900,000) = $81,100,000
B.) Investment in Operating capital for 2021:
Increase in gross fixed asset + (increase in current asset - increase in liability)
$56,000,000 + ( $44,000,000-$36,000,000)
= $56,000,000 + $8,000,000
= $64,000,000
C.) Free cash flow
Operating Cash flow - investment in operating
$81,100,100 - $64,000,000 = $17,100,000
