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Calculate the free cash flow for Burns Mills Ltd

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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).

Reference no: EM133121610

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