How much would free cash flow change?

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Reference no: EM133616054

Problem

Consider the following data with regards to free cash flow (FCF):

1. Revenue = $100,000
2. Cash operating expenses = $93,500
3. Depreciation expense = $1,000
4. Effective tax rate = 25%
5. Incremental investment in operating net working capital = $50
6. Incremental investment in long-term operating assets = $4,000

If the incremental investment in long-term operating assets was to increase by 10% but everything else remains as shown above, how much would free cash flow change? Assume no other factors change.

Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $90.1234, enter 90.1234. If your result shows a decrease, enter a negative figure.

Consider the following data with regards to free cash flow (FCF):

If the incremental investment in long-term operating assets was to increase by 10% but everything else remains as shown above, how much would free cash flow change?

Reference no: EM133616054

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