Which of the following formulas correctly estimates free cash flows to
Which of the following formulas correctly estimates free cash flows to the firm?
A) FCFF = EBIT × (1 + tax rate) + non cash expenses – capital expenditures – net increases in working capital
B) FCFF = EBIT × (1 – tax rate) + non cash expenses – capital expenditures – net increases in working capital
C) FCFF = EBIT × (1 – tax rate) + non cash expenses + capital expenditures – net increases in working capital
D) FCFF = EBIT × (1 – tax rate) – non cash expenses + capital expenditures – net increases in working capital
ANSWER
B
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