Working on an accounting paper - need the instructions explained more clearly. -Determine the companys...
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Accounting
Working on an accounting paper - need the instructions explained more clearly.
-Determine the companys projected Cash Flows (CF) from Operating Activities by adding the projected Net Profit (or Net Income) and the amount of Depreciation of the most recent year. (You may use the companys Income Statements of the past year.) -Determine the appropriate amount (5% to 10%) from the CF from Operating to reinvest into the business to maintain the future operating Cash Flows. -From the determined Cash Flows from Operating Activities, take out the amount to be reinvested. (Expected Operating CF Reinvestment = Free Cash Flows (FCF))
*Basically, where do these numbers come from? How do I decide which percentage to use from 5% to 10%?
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