What is the expected cashflow of the company XYZ in year 1 if its EBIT in year 1 is $270,000, depreciation is $85,000, change in

Question

2 years ago

5

net working capital is $19,000, and the capital expenditure is $35,000? The tax rate is 25%.
a. 101,500
b. 233,500
c. 271,500
d. 171,500

1 answer:

vitfil [10] · Answer 1 · 2022-07-22T13:23:16+03:00

3 0

Answer: b. 233,500

Explanation:

The expected cashflow is;

= (EBIT * (1 - tax) ) + Depreciation - change in net working capital - capital expenditure

= (270,000 * (1 - 25%)) + 85,000 - 19,000 - 35,000

= $‭233,500‬