Question

Cellular Access​ Inc., is a cellular telephone service provider that reported net operating profit after tax​ (NOPAT) of $ 250$250 million for the most recent fiscal year. The firm had depreciation expenses of $ 100$100 ​million, capital expenditures of $ 200$200 ​million, and no interest expenses. Working capital increased by $ 10$10 million. Calculate the free cash flow for Cellular Access for the most recent fiscal year.

Answer 1

Answer:

Therefore, the free cash flow for Cellular Access for the most recent fiscal year is $ 140 million

Explanation:

Given;

Net operating profit after tax​ (NOPAT) = $ 250

Depreciation expenses = $100 ​million

Capital expenditures = $200 ​million

Net working capital increment = $10 million

Free Cash Flows = net operating profit after tax​ + Depreciation - capital expenditure - Increase in net working capital

Free Cash Flows = ($250 + $100 - $200 - $10) million        Free Cash Flows = $ 140 million