You are evaluating a capital investment that promises in year 1 revenue of $480,000.00 with operating expenses of $300,000 and depreciation of $50,000 with a tax rate of 25%. Using this information only, what is the free cash flow in year 1? O $180,000 O $147,500 O $130,000 O $97,500

You are evaluating a capital investment that promises in year 1 revenue of $480,000.00 with operating expenses of $300,000 and depreciation of $50,000 with a tax rate of 25%. Using this information only, what is the free cash flow in year 1? O $180,000 O $147,500 O $130,000 O $97,500

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 4CMA

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Question

You are evaluating a capital investment that promises in year 1 revenue of $480,000.00 with operating expenses of $300,000
and depreciation of $50,000 with a tax rate of 25%. Using this information only, what is the free cash flow in year 1?
$180,000
$147,500
O $130,000
O $97,500

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