A stock market analyst has forecasted the following year-end numbers for Raedebe Technology.  Sales = $70 million.  EBITDA = $20 million.  Depreciation = $ 7 million.  Amortization = $ 0. The company’s tax rate is 40 percent. The company does not expect any changes in its net operating working capital. This year the company’s planned gross capital expenditures will total $12 million. (Gross capital expenditures represent capital expenditures before deducting depreciation.) What is the company’s forecasted free cash flow for the year?

A stock market analyst has forecasted the following year-end numbers for Raedebe Technology.  Sales = $70 million.  EBITDA = $20 million.  Depreciation = $ 7 million.  Amortization = $ 0. The company’s tax rate is 40 percent. The company does not expect any changes in its net operating working capital. This year the company’s planned gross capital expenditures will total $12 million. (Gross capital expenditures represent capital expenditures before deducting depreciation.) What is the company’s forecasted free cash flow for the year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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