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Calculate the FCFF and FCFE

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Reference no: EM133037394

Question - A is evaluating Invader Company for 2020. A gathered the following information:

Net income: 500,000

Interest expense: 1,200

Depreciation: 5,000

Investment in working capital: 100,000

Investment in PPE: 200,000

Tax rate: 25%

Net borrowing: 10,000

Amortization Expense: 2,500

Unrealized Gain: 6,000

The tax treatment of all non-cash items is the same as that of other items in the books. There are no deferred taxes incurred.

1. Calculate the FCFF.

2. Calculate the FCFE.

Reference no: EM133037394

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