A company has CFO of 400, interest paid 50, tax rate 30 percent, and capital expenditures (FCInv) of 120. Using the FCFF formula from CFO, what is FCFF?
Explanation
Apply FCFF = CFO + Interest*(1 - tax rate) - FCInv when CFO includes interest paid. Be careful with arithmetic: 400 + 50*(0.7) - 120 = 400 + 35 - 120 = 315.
Other questions
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