Celeron, Inc. expects net cash flow from operating activities to be $150,000, and the company plans purchases of equipment of $81,000 and repurchases of stock of $17,000. What is Celeron, Inc.'s free cash flow?A. $69,000B. $150,000C. $52,000D. $81,000

Free cash Flow is a measure of a company`s financial performance and represents the cash in hand,…

Answered: Celeron, Inc. expects net cash flow…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the cash flows and competitive spreads shown in the table below. ($ millions) Year 0 Year 1 Year 2 Years 3–10 Investment 190 Production (millions of pounds per year) 0 0 49 89 Spread ($ per pound) 1.04 1.04 1.04 1.04 Net revenues 0 0 50.96 92.56 Production costs 0 0 39.00 39.00 Transport 0 0 0 0 Other costs 0 29 29 29 Cash flow –190 −29 –17.04 24.56 NPV (at r = 6%) = 0 Assume the dividend payout ratio each year is 100%.a. Calculate the year−by−year book and economic profitability for investment in polyzone production. Assume straight−line depreciation over 10 years and a cost of capital of 6%. (Negative answers should be indicated by a minus sign. Leave no cells blank − be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.)…

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Celeron, Inc. expects net cash flow from operating activities to be $150,000, and the company plans purchases of equipment of $81,000 and repurchases of stock of $17,000. What is Celeron, Inc.'s free cash flow? A. $69,000 B. $150,000 C. $52,000 D. $81,000