Given Are the Following Data for Year 1

question 57

Multiple Choice

Given are the following data for year 1:
Profits after taxes = $14 million; Depreciation = $6 million; Interest expense = $6 million; Investment in fixed assets = $12 million; Investment in working capital = $3 million. The corporate tax rate is 25 percent. Calculate the free cash flow (FCF) for year 1.

• A)$4 million
• B)$9.5 million
• C)$6 million
• D)$7 million

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Definitions:

Plutchik

Refers to Robert Plutchik, who is best known for proposing a psychoevolutionary theory of emotion that includes the famous wheel of emotions.

Facial Expression Of Disgust

A universal facial reaction indicating aversion, often characterized by a wrinkled nose, raised upper lip, and narrowed eyes.

Innate Reaction

A natural, automatic response to a stimulus that is inherent and not learned, often seen in instinctual behaviors.

Universally Recognized

Acknowledged or accepted by all as true, valid, or obligatory without exception across different cultures and societies.