Chapter 6 Qs 1 thru 4

Chapter 6 Qs 1 thru 4 - Chapter 6 Question 1 Income...

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Chapter 6 Question 1 Income Statement Reorganized balance sheet Today Year 1 Revenues 800.0 840.0 Operating working capital Operating costs (640.0) (672.0) Property and equipment Depreciation (40.0) (42.0) Invested capital Operating profits 120.0 126.0 Debt Interest (16.0) (16.0) Shareholders' equity Earnings before taxes 104.0 110.0 Invested capital Taxes (26.0) (27.5) Net Income 78.0 82.5 Key Data: Operating tax rate 25% 25% If property is depreciated, PPE must be replaced.
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Free cash flow Today Year 1 Year 1 70.1 73.6 Operating profits 126.0 438.4 460.3 Operating taxes (31.5) 508.5 533.9 NOPLAT 94.5 200.0 210.0 Depreciation 42.0 308.5 323.9 Gross cash flow 136.5 508.5 533.9 Increase in working capital (3.5) Capital expenditures (63.9) Free cash flow 69.1
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Chapter 6 Question 2 Equity value Shares outstanding 50.0 x Share price 19.16 Equity value 958.2 Weighted average cost of capital Proportion Market of total Cost of
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Chapter 6 Qs 1 thru 4 - Chapter 6 Question 1 Income...

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