Lamm Corporation Is Expected Have EBIT of $6

question 73

Multiple Choice

Lamm Corporation is expected have EBIT of $6.2M this year. Lamm Corporation is in the 40% tax bracket, will report $1.2M in depreciation, will make $1.4M in capital expenditures, and will have a $160,000 increase in net working capital this year. What is Lamm's FCFF?

• A) 6,200,000
• B) 6,160,000
• C) 3,360,000
• D) 3,680,000
• E) 4,625,000

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Definitions:

Service Hours

A measure of the amount of time spent providing services to customers, often used to allocate service department costs to producing departments.

Net Operating Income

An evaluation of a business's core operating income, omitting the effects of interest and tax expenses.

Price Reduction

A decrease in the selling price of a product or service, often to stimulate demand or respond to competition.

Sales Forecast

A projection of future sales revenue, based on historical data, market analysis, and other factors.