Fundamentals of Corporate Finance, Student Value Edition (3rd Edition) - Standalone book
Fundamentals of Corporate Finance, Student Value Edition (3rd Edition) - Standalone book
3rd Edition
ISBN: 9780133507911
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 9, Problem 26P
Summary Introduction

Free cash flow: The flow of additional cash received by the organization from the new project is called free cash flow. Free cash flow is determined by eliminating non cash expenses and including all capital investment.

Net Present Value: It is a one of the technique under capital budgeting which helps to decide whether the investment to made on the long term investment are profitable or not. It is difference of present value of cash incoming from the project and present value cash outgoing in project in particular time period.

To determine:

Free cash flow and net present value of the project.

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