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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
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
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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
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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