The following figures have been extracted from the financial statements of Herzi SpA, a chain of retail stores, for the year ending 31/12/2020. Assume corporate taxes are levied at a rate of 20% as below. Revenues£500mCost of goods£300mEBIT£100mTax paid£16mDepreciation£20mDebt interest£20mCapital expenditures£15mDecrease in working capital £5mThe Unlevered Free Cash Flow to the Firm of Herzi in 2020 is: a£90m b£84m c£94m dI do not want to answer this question. e£100m f£80m

Unlevered Free Cash Flow = EBIT - Taxes + Depreciation - CAPEX - Increase in Working Capital

Answered: The following figures have been…

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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The following figures have been extracted from the financial statements of Herzi SpA, a chain of retail stores, for the year ending 31/12/2020. Assume corporate taxes are levied at a rate of 20% as below.

Revenues	£500m
Cost of goods	£300m
EBIT	£100m
Tax paid	£16m
Depreciation	£20m
Debt interest	£20m
Capital expenditures	£15m
Decrease in working capital	£5m

The Unlevered Free Cash Flow to the Firm of Herzi in 2020 is:

a
£90m
b
£84m
c
£94m
d
I do not want to answer this question.
e
£100m
f
£80m

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