Unformatted text preview: 7,000,000 Earnings before interest, taxes, depreciation and amort (EBITDA) $ 7,000,000 Depreciation and amortization 3,000,000 Earnings before interest expense and taxes (EBIT) $ 4,000,000 Interest expense 1,500,000 Earnings before income taxes (EBT) $ 2,500,000 Income taxes (40%) 1,000,000 Net income (NI) $ 1,500,000 Bailey’s total operating capital is $20 million and its after-tax cost of capital is 10 percent. Therefore, Bailey’s total after-tax dollar cost of operating capital is $2 million. During the past year, Bailey made a $1.3 million net investment in its operating capital. a. What is Bailey’s Net Operating Profit After Taxes (NOPAT) for the year? b. What is Bailey’s net cash flow (NCF) for the year? c. What is Bailey’s operating cash flow (OCF) for the year? d. What is Bailey’s free cash flow (FCF) for the year?...
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- Spring '07
- Income Statement, Generally Accepted Accounting Principles, Earnings before interest and taxes