Question

uppose for a firm that the tax rate is 23%, ROA is 7%, and ROE is...

uppose for a firm that the tax rate is 23%, ROA is 7%, and ROE is 10%. What happens to the firm's FCFF under each condition?

a) The firm's account's receivable increases by $100

What formula will you use?

What is the effect?

Show/explain your work.

b) The firm repays a loan of $100.

What formula will you use?

What is the effect?

Show work

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