Discounted Cash Flow Valuation Practice Exam 2 Question 3
In the given example. I am given a spreadsheet for Getco. For questions 1 and 2, I successfully calculated the gross cash flow and NOPAT. (0.95 and 0.35). However, the next step is to calculate the UFCF for 2023. The formula is
NOPAT (0.35)
+D&A (0.6)
+/- Delta Working Capital (+0.2)
-CAPEX (-0.7)
+/- Other operating assets (-0.2)
+/- Other operating liabilities (+0.1)
The answer is 1.05 billion, but the explanation doesn't line up with the formula or inputs that are provided. CAPEX is 0.7 in the spreadsheet, but it's nowhere to be found in the explanation as it is 0.1. The same applies to delta working capital. Am I missing something here?
NOPAT (0.35)
+D&A (0.6)
+/- Delta Working Capital (+0.2)
-CAPEX (-0.7)
+/- Other operating assets (-0.2)
+/- Other operating liabilities (+0.1)
The answer is 1.05 billion, but the explanation doesn't line up with the formula or inputs that are provided. CAPEX is 0.7 in the spreadsheet, but it's nowhere to be found in the explanation as it is 0.1. The same applies to delta working capital. Am I missing something here?
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