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Question:
The company’s free cash flow to the firm (FCFF) is closest to:
A
$840.
explanation
FCFF = Cash flow from operations x interest expense net of tax - net capital expenditures
FCFF = $800 + 80(1 - 0.35) - 40 + 30 = $842
Depreciation and amortization do not have to be added when calculating FCFF from CFO. They are added when calculating FCFF from net income.
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