Old Exam Questions - Financial Statements, Cash Flow, and Taxes
Page 42 of 44 Pages
Based on the information above, determine the free cash flow (FCF) for 2007.
Assume that the firm had total invested capital (total investor-supplied operating
capital) for 2007 of $4,817,500 and a weighted average cost of capital of 11 percent.
Given this information, determine the economic value added (EVA) for 2007.
Assuming that all sales were on credit, and using a 365-day year, determine the daily
sales outstanding (DSO) for 2007.
As you can calculate, in 2006 the firm’s profit margin was 15.02%, total asset turnover
was 0.80321285, and the equity multiplier was 1.67114094. In 2007, the profit margin
went down slightly, but the total asset turnover and the equity multiplier went up.
Determine what the return on equity would have been for the firm in 2007 if it had been