Top Posters
Since Sunday
78
19
16
15
12
10
10
9
8
8
8
8
New Topic  
wrote...
Posts: 170
Rep: 0 0
A week ago
Use the information for the question(s) below.

Temporary Housing Services Incorporated (THSI) is considering a project that involves setting up a temporary housing facility in an area recently damaged by a hurricane.  THSI will lease space in this facility to various agencies and groups providing relief services to the area.  THSI estimates that this project will initially cost $5 million to set up and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total $12 million during this year and depreciation expense will be another $3 million.  THSI will require no working capital for this investment.  THSI's marginal tax rate is 35%.  


Ignoring the original investment of $5 million, what is THSI's free cash flow for the first and only year of operation?

▸ $8.0 million

▸ $3.75 million

▸ $6.25 million

▸ $5.0 million
Textbook 
Fundamentals of Corporate Finance
Edition: 2nd
Authors:
Read 53 times
1 Reply
Replies
Answer verified by a subject expert
wrote...
Posts: 204
A week ago
Sign in or Sign up in seconds to unlock everything.
$6.25 million
1
Related Topics
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers.
Learn More
Improve Grades
Help Others
Save Time
Accessible 24/7
  108 People Browsing
Your Opinion
Related Images
 137
 71
 92