Randall and Arts Inc. has an expected net operating profit after taxes, EBIT(1-T), of $3,200 million in the coming year. In addition, the firm is expected to have net capital expenditures of $480 million, and net operating working capital (NOWC) is expected to increase by $35 million. How much free cash flow (FCF) is Randall and Arts Inc. expected to generate over the next year? a) $2,755 million b) $3,645 million c) $45,828 million d) $2,685 million

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
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Randall and Arts Inc. has an expected net operating profit after
taxes, EBIT(1-T), of $3,200 million in the coming year. In
addition, the firm is expected to have net capital expenditures
of $480 million, and net operating working capital (NOWC) is
expected to increase by $35 million.
How much free cash flow (FCF) is Randall and Arts Inc.
expected to generate over the next year?
a) $2,755 million
b) $3,645 million
c) $45,828 million
d) $2,685 million
Transcribed Image Text:Randall and Arts Inc. has an expected net operating profit after taxes, EBIT(1-T), of $3,200 million in the coming year. In addition, the firm is expected to have net capital expenditures of $480 million, and net operating working capital (NOWC) is expected to increase by $35 million. How much free cash flow (FCF) is Randall and Arts Inc. expected to generate over the next year? a) $2,755 million b) $3,645 million c) $45,828 million d) $2,685 million
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