Which of the Following Equation Is Used to Calculate Unlevered $\times$

question 4

Multiple Choice

Which of the following equation is used to calculate unlevered cash flow from the income statement?

• A)Unlevered cash flow = Profit before interest and taxes + Depreciation and amortization - Change in working capital - Capital expenditures + Sales of capital assets - (Profit before interest and taxes \(\times\) tax rate)
• B)Unlevered cash flow = Operating cash inflow + Investing cash inflow - Debt interest - Debt interest tax subsidy
• C)Unlevered cash flow = Profit before interest and taxes + Depreciation and amortization - Change in working capital - Capital expenditures + Sales of capital assets - Net realized capital gains - (Profit before interest and taxes \(\times\) tax rate)
• D)Unlevered cash flow = Net cash flow from operating activities + Net cash flow from investing activities + Debt interest tax subsidy

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Definitions:

Price-fixing

A form of market manipulation where competitors collude to set prices at a certain level, rather than allowing them to be determined naturally by market forces, which is illegal in many jurisdictions.

Tying Contracts

Agreements where a seller conditions the sale of one product (the tying product) on the buyer's agreement to purchase a separate product (the tied product).

Horizontal Merger

A merger between firms in the same industry operating at the same level of the production process, often aimed at reducing competition and achieving economies of scale.

Conglomerate Merger

A type of merger where two or more companies operating in completely different industries join forces or come under the control of one company.