Calculate firm a free cash flow

Assignment Help Financial Management
Reference no: EM132951840

In 2012, Firm A had sales of $500 million, COGS of $210 million, SGAE of $70 million, depreciation (not included in COGS or SGAE) of $60 million, and a decrease in net PPE by $25 million. The marginal corporate tax rate was 20%. Net working capital was 15% of sales in 2011 as well as in 2012. Sales in 2011 were $470 million. There was no change in net other assets and no operating lease interest in 2012. Calculate Firm A's free cash flow (as appropriate in the WACC method) in 2012. Show your calculations. Write down exactly which formula or expression you use and which numbers correspond to each term.

Reference no: EM132951840

Questions Cloud

Calculate the income taxes on the retroactive increase : Calculate the income taxes on the retroactive increase paid on a separate cheque.
Calculate feraz employment insurance premium : Calculate Feraz's Employment Insurance premium, if his employer was situated in Saskatchewan and the yearly maximum contribution will not be exceeded.
What is the weighted average number of shares : The following information has been obtained from the Mastic Corporation: What is the weighted average number of shares
What is the cost to the firm from the underpricing : Superman Enterprises has just completed an initial public offering. The firm sold 2,500,000 new shares (the primary offering). In addition, existing shareholder
Calculate firm a free cash flow : In 2012, Firm A had sales of $500 million, COGS of $210 million, SGAE of $70 million, depreciation (not included in COGS or SGAE) of $60 million
What is the value of firm b''s interest tax shield : Assume that capital markets are perfect except for the presence of taxes. Firm B has a market value of equity of $150 million and a market value of debt of $30
What amount would be reported in si investment : What amount would be reported in SI's investment in the OI account on December 31, 20X6, assuming that the equity method is used
What is the volume variance : Total FFS Visit Volume 100,000 visits Payer Mix:Blue Cross 40%Highmark 60% Reimbursement Rates:
Adoption of shale gas extraction technology : Depending on the adoption of shale gas extraction technology in Poland and Ukraine, world natural gas prices will be either high or low in each of the years 201

Reviews

Write a Review

Financial Management Questions & Answers

  What is the present value of the dividends to be paid out

Kleine Toymakers is introducing a new line of robotic toys, which it expects to grow their earnings at a much faster rate than normal over the next three years. After paying a dividend of $2.00 last year, it does not expect to pay a dividend for the ..

  Compute the equivalent annual cost for each machine

The company requires a 15% rate of return and uses straight-line depreciation to a zero book value over the life of its equipment.

  What will be after-tax cash flow of this sale

Suppose you sell a fixed asset for $126,000 when its book value is $146,000. If your company’s marginal tax rate is 40 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

  Difference between historical-implied market risk premium

What is the difference between historical and implied market risk premium and which one is the most appropriate?

  Firm has undertaken feasibility study to evaluate project

A firm has undertaken a feasibility study to evaluate a project that has the following estimated cashflows:

  What annual mileage do the two methods

A traveling salesman travels from city to city for business. At what annual mileage do the two methods give the same reimbursement?

  Rate of growth thereafter similar to that of economy overall

You are considering buying stock in Biqing, Inc., a West Texas company that provides PPO medical services. The dividend just paid (i.e., D0) was $1.00 and is expected to increase by 20% per year for two years. Growth will then slow to 10% per year fo..

  What is the annual dollar amount of interest will receive

The interest rate is 3.82 percent. What is the annual dollar amount of interest you will receive each year?

  Determine the withdrawal amount that occurs on the investor

On his 66th birthday the investor will make her first annual retirement withdrawal, and the final withdrawal will take place on her 93rd birthday.

  What is opportunity cost of labor employed for the project

Suppose that the labor market is perfectly competitive and the market wage is $15. What is the opportunity cost of the labor employed for the project?

  What are the main forms of business ownership

What are the main forms of business ownership in the United States? What are the advantages and disadvantages of using each type of ownership structure?

  The basics of the discounted cash flow model for valuation

Explain the basics of the discounted cash flow model for valuation. Explain the key differences between this and the dividend discount model.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd