Calculate firm a free cash flow

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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: EM132952901

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