10. Free cash flow to equity (FCFE) is calculated as a) Net Income + Depreciatio
ID: 2744271 • Letter: 1
Question
10.
Free cash flow to equity (FCFE) is calculated as
a) Net Income + Depreciation Expense – Capital Expenditures – Change in
Working Capital – Principal Debt Repayments + New Debt Issues.
b) EBIT (1 –T) + Depreciation Expense – Capital Expenditures – Change
in Working Capital – Change in Other Assets.
c) Net Income + Depreciation Expense – Capital Expenditures + Change
in Working Capital – Principal Debt Repayments - New Debt Issues.
d) Net Income - Depreciation Expense + Capital Expenditures – Change in
Working Capital – Principal Debt Repayments + New Debt Issues.
e) EBIT (1 –T) + Depreciation Expense + Capital Expenditures + Change
in Working Capital – Change in Other Assets.
Operating Free cash flow (FCFF) is calculated as
a) Net Income + Depreciation Expense – Capital Expenditures – Change in
Working Capital – Principal Debt Repayments + New Debt Issues.
b) EBIT (1 –T) + Depreciation Expense – Capital Expenditures – Change
in Working Capital – Change in Other Assets.
c) Net Income + Depreciation Expense – Capital Expenditures + Change in
Working Capital – Principal Debt Repayments - New Debt Issues.
d) Net Income - Depreciation Expense + Capital Expenditures – Change in
Working Capital – Principal Debt Repayments + New Debt Issues.
e) EBIT (1 –T) + Depreciation Expense + Capital Expenditures + Change
in Working Capital – Change in Other Assets.
11.
a) Net Income + Depreciation Expense – Capital Expenditures – Change in
Working Capital – Principal Debt Repayments + New Debt Issues.
b) EBIT (1 –T) + Depreciation Expense – Capital Expenditures – Change
in Working Capital – Change in Other Assets.
c) Net Income + Depreciation Expense – Capital Expenditures + Change in
Working Capital – Principal Debt Repayments - New Debt Issues.
d) Net Income - Depreciation Expense + Capital Expenditures – Change in
Working Capital – Principal Debt Repayments + New Debt Issues.
e) EBIT (1 –T) + Depreciation Expense + Capital Expenditures + Change
in Working Capital – Change in Other Assets.
Explanation / Answer
Answer 10: (a) i.e. Net Income + Depreciation Expense – Capital Expenditures – Change in Working Capital – Principal Debt Repayments + New Debt Issues.
Answer 11: (b) i.e. EBIT (1 –T) + Depreciation Expense – Capital Expenditures – Change in Working Capital – Change in Other Assets.
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