In the discounted cash flow (DCF) method, which of the following is the correct formula for calculating Unlevered Free Cash Flows (UFCF)? A)EBIT (1-tax rate) + Depreciation and Amortization (D&A) + Investment in Net Working Capital (\Delta NWC) + Capital Expenditure (CapEx) B)EBIT (1-tax rate) – D&A – \Delta NWC – CapEx C)EBIT (1-tax rate) + D&A – \Delta NWC + CapEx D)EBIT (1-tax rate) + D&A – \Delta NWC – CapEx E)EBIT (1-tax rate) – D&A + \Delta NWC + CapEx
In the discounted cash flow (DCF) method, which of the following is the correct formula for calculating Unlevered Free Cash Flows (UFCF)? A)EBIT (1-tax rate) + Depreciation and Amortization (D&A) + Investment in Net Working Capital (\Delta NWC) + Capital Expenditure (CapEx) B)EBIT (1-tax rate) – D&A – \Delta NWC – CapEx C)EBIT (1-tax rate) + D&A – \Delta NWC + CapEx D)EBIT (1-tax rate) + D&A – \Delta NWC – CapEx E)EBIT (1-tax rate) – D&A + \Delta NWC + CapEx
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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In the discounted cash flow (DCF) method, which of the following is the correct formula for calculating Unlevered
A)EBIT (1-tax rate) +
B)EBIT (1-tax rate) – D&A – \Delta NWC – CapEx
C)EBIT (1-tax rate) + D&A – \Delta NWC + CapEx
D)EBIT (1-tax rate) + D&A – \Delta NWC – CapEx E)EBIT (1-tax rate) – D&A + \Delta NWC + CapEx
Transcribed Image Text:In the discounted cash flow (DCF) method, which of the following is the correct formula for calculating Unlevered Free Cash Flows (UFCF)? A) EBIT (1-tax rate) + Depreciation and Amortization (
D&A) + Investment in Net Working Capital (\Delta NWC) + Capital Expenditure (CapEx) B)EBIT (1-tax rate) - D&A -\Delta NWC-CapEx C)EBIT (1-tax rate) + D&A -\Delta NWC + CapEx D
)EBIT (1-tax rate) + D&A -\Delta NWC - CapEx E)EBIT (1-tax rate) - D&A + \Delta NWC + CapEx
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