Calculating operating income before tax-free cash flow

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Reference no: EM13826350

Problem:

Consider a firm with the following characteristics: (1) beginningâ€ofâ€year net operating capital = $820, end of year net operating capital = $890, beforeâ€tax operating income = $160, and tax rate = 40%. If the firm's tax and finance methods of depreciation are the same and $15 of depreciation was deducted in the computation of the beforeâ€tax operating income, what is this firm's free cash flow?

Additional Information:

This question is basically belongs to Finance as well as it explains about calculating operating income before tax and free cash flow of the firm.

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Reference no: EM13826350

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