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What is the company free cash flow to the firm for the year

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Reference no: EM132987391

Problem 1: RMC Corp has operating income (EBIT) of P3,500,000. The company's depreciation expense is P800,000 and it has no amortization expense. The company is 100 percent equity financed (that is, its interest expense is zero). The company has a 25 percent tax rate, and its net investment in operating capital is P800,000. What is the company's free cash flow to the firm for the year?

a. 2,500,000
b. 2,625,000
c. 2,425,000
d. 1,500,000

Reference no: EM132987391

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