Vasudevan Inc. recently reported operating income of $2.30 million, depreciation of $1.20 million, and had a tax rate of 25%. The firm's expenditures on fixed assets and net operating working capital totaled $0.60 million. How much was its free cash flow, in millions?

Question

Business

Lukas

7 May, 16:38

Vasudevan Inc. recently reported operating income of $2.30 million, depreciation of $1.20 million, and had a tax rate of 25%. The firm's expenditures on fixed assets and net operating working capital totaled $0.60 million. How much was its free cash flow, in millions?

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Answers (1)

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Chandler Blackwell · Answer 1

free cash flow is 2.352 million

Explanation:

Given dа ta:

operating income is $2.30 million

depreciation $1.20

tax rate is 25%

free cash flow is calculated by using below formula

free cash flow = operating income (1 - Tax) + depreciation - fixed working capital

= 2.75 (1 - 0.25) + 1.20 - 0.6

= 2.352 million

free cash flow is 2.352 million