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Business, 19.11.2019 06:31 sammielucero

You are trying to estimate the free cash flow to the firm on january 1, 2010, for a software company and have been provided with the following information for 2009 (all numbers in millions) (hint: calculate adjusted ebit first): revenues $800 - depreciation & amortization $100 - r& d expenses $200 - other operating expenses $200 operating income $300 - interest expenses $50 taxable income $250 - taxes paid $100 net income $150 you are also given the following information: the firm invested $180 million in property, plant and equipment in 2009. the firms r& d generally takes an average of 4 years to pay off; its r& d expenses were $40 millions in 2005, $80 million in 2006, $120 million in 2007 and $160 million in 2008. total working capital (including cash) increased by $10 million last year but the cash balance decreased by $20 million. the firm has no short term debt. estimate the free cash flow to the firm in 2009 (you will need an adjusted ebit)

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