How much of the free cash flow will the firm have

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Reference no: EM131328363

Meltzer Electronics estimates that its total financing needs for the coming year will be $34.5 million. During the coming fiscal year, the firm's required financing payments on its debt-and-equity financing will total $12.9 million. The firm's financial manager estimates that operating cash flows for the coming year will total $33.7 million and that the following changes will occur in the accounts noted.

Account	Forecast Change
Gross fixed assets	$8.9 million
Change in current assets	+2.3 million
Change in accounts payable	+1.3 million
Change in accrued liabilities	+0.8 million

a. How much of the free cash flow will the firm have available as a source of new internal financing in the coming year?

b. How much external financing will Meltzer require during the coming year to meet its total forecast financing need?

Reference no: EM131328363

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