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Apple is looking to expand its operations by 10% of it's net property, plant, and equipment. The estimated life of this new property, plant, and...
Apple is looking to expand its operations by 10% of it's net property, plant, and equipment. The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant and equipment's cost. The annual EBIT for this new expansion will be 18% of the cost. The straight-line method will be used to depreciate this equipment. Also assume that there will be no increases in net working capital each year. 35% is the tax rate. How to convert the EBIT to free cash flow for the next 12 years?
