What is the free cash flow of a firm with revenues of $314 million, operating profit margin of 39%, tax rate of 29%, depreciation and amortization expense of $24 million, capital expenditures of $36 million, acquisition expenses of $7 million and change in net working capital of $16 million

$51.95 million

Explanation:

We are given;

Revenues = $314 million

operating profit margin = 39%

tax rate = 29%

depreciation & amortization expense = $24 million

capital expenditures = $36 million, acquisition expenses = $7 million change in net working capital = $16 million

Now, tax rate = 29%

Thus, profit after tax = 314 - (314 × 29%) = $222.94

operating profit margin is 39%. Thus, net income = 39% × $222.94 = $86.95

Formula for free cash flows is;

Free cash flow = Net income + Depreciation & amortization expenses - changes in net working capital - capital expenditures - acquisition expenses

Thus;

Free cash flow = 86.95 + 24 - 16 - 36 - 7 = $51.95 million

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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