Financial Statements, Cash Flow, and Taxes - Solutions8

Financial Statements, Cash Flow, and Taxes - Solutions8 -...

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Old Exam Questions - Financial Statements, Cash Flow, and Taxes - Solutions Page 71 of 73 Pages Less: Depreciation -$900,000.00 -$1,270,000.00 Net Fixed Assets $2,100,000.00 $2,430,000.00 Total Assets $4,980,000.00 $6,750,000.00 Accounts Payable $1,200,000.00 $1,800,000.00 Accruals $300,000.00 $450,000.00 Current Liabilities $1,500,000.00 $2,250,000.00 Debt $500,000.00 $900,000.00 Common Stock $2,000,000.00 $2,000,000.00 Retained Earnings $980,000.00 $1,600,000.00 Total Liability and Equity $4,980,000.00 $6,750,000.00 71. Based on the information above, determine the free cash flow (FCF) for 2007. A. - $185,250 B. - $169,750 C. - $154,250 D. - $177,500 * E. - $162,000 There are a lot of different ways to solve this problem, simply choose the method you are most comfortable with. NOPAT = (EBIT)(1-T) = ($1,430,000)(1-.4) = $858,000 DEP = $370,000 OCF = NOPAT + DEP = $858,000 + $370,000 = $1,228,000 NOWC Y2006 = $2,880,000 - $1,500,000 = $1,380,000 NOWC Y2007 = $4,320,000 - $2,250,000 = $2,070,000
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Financial Statements, Cash Flow, and Taxes - Solutions8 -...

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