Vasudevan Inc

question 137

Multiple Choice

Vasudevan Inc.recently reported operating income of $4.80 million,depreciation of $1.20 million,and had a tax rate of 40%.The firm's expenditures on fixed assets and net operating working capital totaled $0.6 million.How much was its free cash flow,in millions?

• A) $3.17
• B) $2.68
• C) $3.48
• D) $3.38
• E) $4.28

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Definitions:

Earnings Growth

An increase in a company's net income over a specified period, indicating financial health and profitability.

Shareholder Value

The value delivered to shareholders because of management's ability to grow earnings, dividends, and share price.

RAP

Regulatory Accounting Principles, which are guidelines for accounting practices in the insurance industry.

Loan Charge-offs

The process by which a bank or other financial institution removes a loan from its balance sheet after determining that it will not be repaid and is, therefore, uncollectible.