Galaxy Corp is under consideration for acquisition. An analyst has projected the following figures for next year: ⚫ Net income: $450m ⚫ Net interest after tax: $150m Change in deferred taxes: +$40m • Depreciation: $250m • Change in net working capital: +$45m • Capital expenditure (CAPEX): $300m Calculate Galaxy Corp's estimated free cash flow.

Galaxy Corp is under consideration for acquisition. An analyst has projected the following figures for next year: ⚫ Net income: $450m ⚫ Net interest after tax: $150m Change in deferred taxes: +$40m • Depreciation: $250m • Change in net working capital: +$45m • Capital expenditure (CAPEX): $300m Calculate Galaxy Corp's estimated free cash flow.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

See similar textbooks

Similar questions

Gambit enterprises is...Accounting question
Help me please asap
J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $4,200,000. Patterson will provide the following pattern of cash inflows and synergistic benefits for the next 20 years. There is no tax loss carryforward. Use Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods. Cash inflow (aftertax) Synergistic benefits (aftertax) 1 to 5 $ 460,000 42,000 Years 6 to 15 $ 620,000 62,000 16 to 20 $ 820,000 72,000 The cost of capital for the acquiring firm is 11 percent. a. Compute the net present value. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. es Net present value b. Should the merger be undertaken? Yes No
The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
The firm is contemplating the following: Crane acquisition cost $ 1,000,000 Years of useful life (economic life) 5 Tax rate 0% Required rate of return on equity 10% Annual revenues $ 2,000,000 Operating expenses include only: “Other expenses” of $1,500,000, plus depreciation. Note annual operating margin. What is year 1: Return on Asset? Return on Equity? EBITDA?
What would be the correct discounted net cash flow to include in an acquisition analysis on these accounting question?
Beyer Company's is considering the purchase of an asset for $205,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 12% return on invetsments. (PV of $1, FV of $1, PVA of $1, and FVA of $1. Net cash flows (Year 1 $70,000, Year 2 $50,000. Year 3 $88,000, Year 4 $159,000 and Year 5 $53,000. A. Compute the net present value of this investment B. Should Beyer accept the investment?
Please give solution for this accounting question
ABC Corporation acquired an asset for a purchase price of P1,200,000. This is expected to appreciate every yearby 5%. The entity will be incurring P50,000 cost to dispose the asset by the end of its 20-year investment period. If the cost to finance this investment is 4%, what is the intrinsic value of the asset after accounting for the cost of illiquidity? a. P1,583,626.69 b. P1,430,297.18 c. P8838,969.98 d. P972,129.05 e. None among the other choices
Beyer Company is considering the purchase of an asset for $205,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 9% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 74,000 $ 59,000 $ 100,000 $ 166,000 $ 54,000 $ 453,000 a. Compute the net present value of this investment.b. Should Beyer accept the investment? Compute the net present value of this investment. (Round your answers to the nearest whole dollar.)
Please provide solution this general accounting question
ABC, Inc., is considering purchase of a new equipment. The expected sales are expected to be $5,556,982. The annual cash operating expenses are expected to be $2,957,536. The annual depreciation is estimated to be $456,926 and the interest expense is estimated to be $206,975. If the tax rate is 33%, what is the operating cash flow?