Questions

COMM_V 298 101 102 103 2025W1 Class 19 Practice Quiz

Multiple fill-in-the-blank

Part 1 of 2: Complete the following Table and Compute the FCF. Notice that, as MRT = 0, then EBIT*(1-MRT) + D&A = EBITDA, so we can use directly EBITDA in this Part. Month 0 Month 1 to Month 59 (single month, not the sum) Month 60 EBITDA [Fill in the blank] [Fill in the blank] [Fill in the blank] CapEx [Fill in the blank] [Fill in the blank] [Fill in the blank] Δ\DeltaNWC [Fill in the blank] [Fill in the blank] [Fill in the blank] FCF [Fill in the blank] [Fill in the blank] [Fill in the blank] Round to the nearest dollar. Input your answer without dollar signs or commas, that is, $98,000 must be input as 98000 Enter zero, do not leave blank. Use a minus for outflows.

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To tackle this table correctly, I’ll walk through the definitions and how the values relate across the three periods, using the provided hint that MRT = 0 so EBITDA is used directly in place of EBIT. First, clarify the core relationship: with MRT = 0, EBITDA is used for the operating earnings measure, and Free Cash Flow (FCF) is computed using a combination of EBITDA, CapEx, and changes in Net Working Capital (ΔNWC) as follows: FCF = EBITDA + CapEx + ΔNWC. Here, CapEx and ΔNWC are entered with their signs indicating cash outflows (negative) or inflows (positive) as provided in the input table. Now examine Month 0 values: - EBITDA Month 0 is given as 0. Since there is no operating activity recorded yet, this makes sense as a starting point. - CapEx Month 0 is -175,000, indicating a cash outlay of 175k ri......Login to view full explanation

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