Free Cash Flow

Question

ChemTech - Free Cash Flow 0

 

Chemtec is undertaking a project that will require an upfront investment today in net working capital, and plant and equipment (i.e., capital expenditures) of $100 million and $200 million, respectively. If there are no revenues or expenses expected until next year, what is the project's free cash flow today in millions of dollars?

 

 

 *Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision.

Answer 1

Free Cash Flow = Operating Cash Flow - Capital Expenditures - Increase in Net Working Capital

Since there are no revenues or expenses today, operating cash flow is 0.

FCF = 0 - 200 - 100

FCF = -300 million

Final answer: -300.00