A company recently reported operating income of $500.0 million, depreciation of $50.0 million, and had a tax rate of 21%. The firm's expenditures on fixed assets and net operating working capital totaled $10.0 million. How much was its free cash flow, in millions? O $435.00 O $455.00 O $335.00
A company recently reported operating income of $500.0 million, depreciation of $50.0 million, and had a tax rate of 21%. The firm's expenditures on fixed assets and net operating working capital totaled $10.0 million. How much was its free cash flow, in millions? O $435.00 O $455.00 O $335.00
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question

Transcribed Image Text:A company recently reported operating income of $500.0 million, depreciation of $50.0 million, and had a tax rate of 21%. The firm's expenditures on fixed assets and net operating working capital totaled $10.0
million. How much was its free cash flow, in millions?
O $435.00
O $455.00
O $335.00
Expert Solution

Information;
Operating income = $500 million
Depreciation = $50 million
Tax rate = 0.21
Expenses on fixed assets and net working capital = $10 million
Free cash flow = ?
Step by step
Solved in 2 steps

Recommended textbooks for you

Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,



Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,

Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education