Fundamentals of Corporate Finance, Student Value Edition
Fundamentals of Corporate Finance, Student Value Edition
3rd Edition
ISBN: 9780133576863
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 20, Problem 3CQ

Based on the forecasts you have already developed, use the following spreadsheet to project Idexo’s free cash flow for 2017-2021. Will the firm’s free cash flow steadily increase over this period? Why or why not?

    1 Year 2017 2018 2019 2020 2021
    2 Free Cash Flow ($000s)
    3 Net Income
    4 Plus: After-Tax Interest Expense
    5 Unlevered Net Income
    6 Plus: Depreciation
    7 Less: Increases in NWC
    8 Less: Capital Expenditures
    9 Free Cash Flow of Firm
    10 Plus: Net Borrowing
    11 Less: After-Tax Interest Expense
    12 Free Cash Flow to Equity

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