You are given the following information for 1994: Sales = $50,000, CoG’s = $15,000, Depreciation = $5000, tax rate = 40%, Net Capital Spending = $15,000, Additions to Net Working Capital = $5000. Calculate EBIT, OCF, and CFA. Do you have to be worried if the CFA is negative? Explain.
You are given the following information for 1994: Sales = $50,000, CoG’s = $15,000, Depreciation = $5000, tax rate = 40%, Net Capital Spending = $15,000, Additions to Net Working Capital = $5000. Calculate EBIT, OCF, and CFA. Do you have to be worried if the CFA is negative? Explain.
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 2P
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You are given the following information for 1994: Sales = $50,000, CoG’s = $15,000,
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