A Firm Reports EBIT of $100 Million

question 8

Multiple Choice

A firm reports EBIT of $100 million. The income statement shows depreciation of $20 million. If the tax rate is 35% and total capital expenditures and increases in working capital total $10 million, what is the free cash flow to the firm?

• A) $57
• B) $65
• C) $75
• D) $95

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Definitions:

Continue Statement

A statement that skips the remaining code in the current iteration and moves the control back to the beginning of the loop for the next iteration.

Break Statement

A statement used to exit from the loop immediately, skipping the remaining iterations.

Do-while

A loop construct that executes a block of code at least once and then repeats the loop as long as a specified condition evaluates to true.

Null Statement

A programming statement that does nothing and is represented by a semicolon by itself.