问题

问题如下：

McLaughlin’s FCFF ($ millions) for 2012 is closest to:

选项：

A.$418.00 B.$485.00 C.$460.00

解释：

Solution

B is correct.

FCFF = NI + NCC + Int(1 – Tax rate) – FCInv – WCInv

Net income (given) = $626; Non-cash charges (depreciation, given) = $243; Interest expense (given) = $186; Tax rate = 294/920 = 32%; Fixed capital investment (given) = $535

FCFF = 626 + 243 + 186(1 – 0.32) – 535 – (–25) = 485.48 = $485 million

A is incorrect. It uses t not (1 – t).

FCFF = 626 + 243 + 186(0.32) – 535 – (–25) = 418.2 = $418 million

C is incorrect. It ignores working capital investment

FCFF = 626 + 243 + 186(1 – 0.32) – 535 = 460.48 = $460 million