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A firm has sales of $10,000, EBIT of $3,000, depreciation of $400, and fixed assets increased...

A firm has sales of $10,000, EBIT of $3,000, depreciation of $400, and fixed assets increased by $2,000. If the firm's tax rate is 30 percent and there were no increases in net operating working capital, what is the firm's free cash flow? Multiple Choice $500 $600 $7400 -$1,220
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Answer #1
Firm's free cash flow = EBIT*(1-tax rate)+Depreciation-Capital Expenditure
= 3000*(1-0.30)+400-2000
= $ 500.00
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