What is the total net present value for cruz free cash flow

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Reference no: EM132653296

Assume a 21% tax rate and that after 2023 the EBIT growth rate will be 2% annually; depreciation will equal capital expenditures, and that net working capital will not change. Also assume a discount rate of 9%. 2020 = year 1. Choose the answer below those best matches your answer. Note that the carry forward from 2019 is a loss (a negative amount).

	2020	2021	2022	2023
EBIT	$2000	$2500	$2800	$2950
Loss Carry Forward (from 2019)	$(1000)
Capital Expenditures	$500	$500	$500	$450
Changes in Working Capital	$40	$(10)	$(20)	$20
Depreciation	$50	$60	$100 $110

Question 1: What is the total Net Present Value for Cruz's free cash flow for the years 2020 through 2023

[A] $5,112 million

[B] $6,385 million

[C] $4,761 million

[D] $5,410 million

[E] $5,304 million

Reference no: EM132653296

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