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Question
SpaceTech is considering a new project with the following projections for Year 2.Year 2 Projections
| EBIT | $400,000 |
| Interest Expense | $20,000 |
| Depreciation Expense | $40,000 |
| Tax Rate | 40% |
| Net Working Capital Needs | $200,000 |
If the projected net working capital needs for Year 1 was $150,000, calculate the free cash flow for Year 2.
A) $130,000
B) $180,000
C) $230,000
D) $280,000
Answer
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