Consider a firm with the following characteristics: (1) beginningâ€ofâ€year net operating capital = $820, endâ€ofâ€year net operating capital = $890, beforeâ€tax operating income = $160, and tax rate = 40%. If the firm’s tax and finance methods of depreciation are the same and $15 of depreciation was deducted in the computation of the beforeâ€tax operating income, what is this firm's free cash flow?
The question belongs to Finance and it discusses about calculating operating income before tax and free cash flow of the firm.
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