Alpha Manufacturing has the following financial information for the current year and projected for next year. Calculate its projected free cash flow to equity.
Current year
Projected
EBIT
$1,500
$1,800
Operating assets
$3,000
$3,400
Operating liabilities
$200
$220
Total debt
$1,500
$1,800
Interest rate on debt
6%
6%
Tax rate
25%
25%
A. $893
B. $983
C. $1,081
D. $1,189
E. $1,308
Answer: D
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