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johnpaech johnpaech
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Posts: 1098
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6 years ago
Bubba Ho-Tep Company reported net income of $300 million for the most recent fiscal year.  The firm had depreciation expenses of $125 million and capital expenditures of $150 million.  Although they had no interest expense, the firm did have an increase in net working capital of $20 million.  What is Bubba Ho-Tep's free cash flow?
A) $170 million
B) $255 million
C) $150 million
D) $5 million
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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Replies
wrote...
6 years ago
B
Explanation:  B) FCF = NI + Dep - Capital Ex - chg NWC = 300 + 125 - 150 - 20 = 255
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