Given Are the Following Data for Year 1

question 27

Multiple Choice

Given are the following data for year 1:
Profits after taxes = $20 million; Depreciation = $6 million; Interest expense = $4 million; Investment in fixed assets = $12 million; Investment in working capital = $4 million. The corporate tax rate is 25 percent. Calculate the free cash flow (FCF) for year 1.

• A)$4 million
• B)$6 million
• C)$8 million
• D)$13 million

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Definitions:

Neural Areas

Specific regions within the brain that are responsible for processing various types of cognitive and physiological functions.

Hypothalamus

A region of the brain responsible for hormonal control, regulation of body temperature, hunger, thirst, and other homeostatic systems.

Ghrelin

A substance primarily generated by the stomach, which encourages the feeling of hunger and communicates the need to eat to the brain.

Huge Appetite

An unusually large desire to consume food, which can be driven by physiological, psychological, or emotional factors.