Question

You are considering an investment in Cruise, Inc. and want to evaluate the firm's free cash...

You are considering an investment in Cruise, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Cruise earned an EBIT of $205 million, paid taxes of $38 million, and its depreciation expense was $62 million. Cruise's gross fixed assets increased by $83 million from 2007 to 2008. The firm's current assets decreased by $23 million and spontaneous current liabilities increased by $7.3 million. What is Cruise's operating cash flow, investment in operating capital and free cash flow for 2008, respectively in millions?

Homework Answers

Answer #1
EBIT 205 Million
Less: Ttaxes -38 Million
Add: Depreciation 62 Million
Operating cashflows 229 Million
Investmennt in Operating capital:
Decrease in Current assets 23 Million
Increase in Current liabilities 7.3 Million
Cashfows from NWC changes 30.3 Million
Free cashflowws:
Operating cashflows 229 Millions
Cashflows from NWC changes 30.3 Millions
Capital Expenditure on FA -83.00 Millions
Free cashflowws: 176.30 Millions
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