Homework Answers
Solution as below, all amounts in $ Million:
| Year | CapEx | Change in Working Capital | EBIT | Depreciation (D) | EBIT (1-T)+T*D with T = 40% | Change in Working Capital | Free Cash Flow (FCF) | Explanation |
| 0 | -1500 | -30 | -1530.00 | CapEx and Working capital changes | ||||
| 1 | 170 | 150 | 162.00 | -32 | 130.00 | FCF = EBIT (1-T)+T*D, also add any net working capital changes | ||
| 2 | 136.50 | increase FCF by 5% as given in qn | ||||||
| 3 | 143.33 | increase FCF by 5% as given in qn | ||||||
| 4 | 146.19 | increase FCF by 2% as given in qn | ||||||
| 5 | 149.12 | increase FCF by 2% as given in qn | ||||||
| 6 | 152.10 | increase FCF by 2% as given in qn | ||||||
| 7 | 155.14 | increase FCF by 2% as given in qn | ||||||
| 8 | 158.24 | increase FCF by 2% as given in qn | ||||||
| 9 | 161.41 | increase FCF by 2% as given in qn | ||||||
| 10 | 62 | 226.64 | increase FCF by 2% as given in qn and return of working capital |
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