FA Module 6 Free cash flow practice exam questions


FA Module 6 Free cash flow practice exam questions

Author
Message
NEAS
Supreme Being
Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)Supreme Being (5.9K reputation)

Group: Administrators
Posts: 4.3K, Visits: 1.3K

FA Module 6 Free cash flow practice exam questions

(The attached PDF file has better formatting.)

[The following scenario applies to the next two questions.]

A firm has the following figures for its GAAP financial statements:

●    Operating cash flow = 619
●    Interest paid = 54
●    Tax rate = 13%
●    Non-cash charges (depreciation and amortization) = 78
●    Fixed capital expenditures = 191
●    Working capital expenditures = 134
●    Shareholder dividends paid = 28
●    New borrowing during the year = 73
●    Debt repayment during the year = 48

Question 6.1: Free cash flow to the firm

What is the free cash flow to the firm?

Solution 6.1: 619 + 54 × (1 – 13%) – 191 = 474.98

(cash flow from operations + interest paid × (1 – the tax rate) – fixed capital investments)

Question 6.2: Free cash flow to equity

What is the free cash flow to equity?

Solution 6.2: 619 – 191 + (73 – 48) = 453

(cash flow from operations – fixed capital investments + net borrowing)





Attachments
GO
Merge Selected
Merge into selected topic...



Merge into merge target...



Merge into a specific topic ID...





Reading This Topic


Login
Existing Account
Email Address:


Password:


Social Logins

  • Login with twitter
  • Login with twitter
Select a Forum....











































































































































































































































Neas-Seminars

Search