Estimate the free cash flow to firm

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Now assume that you have been asked to estimate the free cash flow to the firm last year for Hadley Holdings and have collected the following information.

- The firm reported earnings before interest, taxes, depreciation, and amortization of $350 million on its revenues of $ 1600 million.

- Depreciation and amortization charges amounted to $ 100 million and capital expenditures were $ 200 million.

- Hadley spent $ 100 million last year on research and development in its software division, following R&D expenditures of $ 60 million (3 years ago), $ 75 million (2 years ago), and $ 90 million (1 year ago) in the prior three years. You believe that research expenditures have an amortizable life of 3 years.

- The working capital items for the last year and the previous year are reported below.

Reference no: EM133239367

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