Reference no: EM133121610
Question - Burns Mill Ltd manufactures papers. The following are financial forecasts for Burns Mills Ltd for 2021.
EBIT (Earnings before interest and taxes), $30,000,000
Annual depreciation, $2,000,000
New capital expenditure, $8,000,000
Increase in NWC (net working capital), $6,000,000
Interest expense, $4,000,000
Additional net debt, $3,000,000
Company tax rate, 30%.
Required - Calculate for Burns Mills Ltd, over 2021,
1. The free cash flow for the firm (FCFF); and
2. The free cash flow to equity (FCFE).