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QUESTION

Polygon Inc. want to increase its free cash flow (FCF) by $210 million, which should result in a higher EVA and stock price. The CFO has made these...

Polygon Inc. want to increase its free cash flow (FCF) by $210 million, which should result in a higher EVA and stock price. The CFO has made these projections for the upcoming year:

- EBIT is projected to equal 850$ million

- Gross capital expenditures are expected to total 360$ million versus depreciation of 120$ mil, so its net capital expenditures should total 240$ million.

- The tax rate is 40%

-There will be no change in cash or marketable securities, nor will there be any changes in notes payable or accurals.

The question is what increase in net working capital ( in mil. dollars) would enable the firm to meet its target increase in FCF?

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