Session 9: Making capital Investment Decisions and Stock Valuations Part 2 Flashcards
1
Q
What is unlevered free cashflows
A
Unlevered free cash flow is the money the business has before paying its financial obligations.
2
Q
What’s Enterprise Value?
A
Market Value + Debt - Cash
3
Q
What are relevant cash flows for a project?
A
the cash flows for porject evaluation should consist of any and all changes in the firm’s cash flows that are a direct consequence of taking the project.
4
Q
Operating Cash flow formula
A
Operating cashflow = EBIT (1-Tax rate) + Depreciation
5
Q
net capital spending
A
capital expenditure (aka Capex)
6
Q
Changes in Net working capital
A
(delta)NWC = CA - CL
7
Q
Positive NWC is what kind of flow?
A
out flow
8
Q
negative NW is what kind of flow
A
inflow
