The correct answer is C (73).

Explanation: FCFF can be calculated from cash flow from operating activities (CFO) as follows:

$FCFF = CFO + \text{Int}(1 - \text{Tax rate}) - \text{FCInv}$

Where:

• CFO is cash flow from operating activities (80).
• Int is interest paid (10).
• Tax rate is 20% (0.20).
• FCInv is capital expenditures (15).

Substituting the values:

$FCFF = 80 + [10 \times (1 - 0.20)] - 15 = 80 + 8 - 15 = 73$

Why not A or B?

• A (57): Incorrectly deducts the after-tax interest adjustment instead of adding it back.
• B (65): Assumes interest is included in financing activities and does not adjust for after-tax interest.