3. Last Year Ratter Robotics had $5 million in Operating income (EBIT). The company has net depreciation expense of $1 million and interest expense of $1million; its corporate tax rate was 40 percent. The company has $14million in current assets and $4 million in non-interest-bearing current liabilities; it has $15 million in net plant and equipment. It estimates that it has an after-tax cost of capital of 10 percent. Assume Ratner only non-cash item was depreciation. a. What was the company's net income for the year? b. What was the company's net cash flow?

3. Last Year Ratter Robotics had $5 million in Operating income (EBIT). The company has net depreciation expense of $1 million and interest expense of $1million; its corporate tax rate was 40 percent. The company has $14million in current assets and $4 million in non-interest-bearing current liabilities; it has $15 million in net plant and equipment. It estimates that it has an after-tax cost of capital of 10 percent. Assume Ratner only non-cash item was depreciation. a. What was the company's net income for the year? b. What was the company's net cash flow?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Bartling Energy Systems recently reported $9,250 of sales, $5,750 of operating costs other than depreciation, and $700 of depreciation. The company had no amortization charges, it had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow?
Watson Oil recently reported (in millions) $8,250 of sales, $5,750 of operating costs other than depreciation, and $1,400 of depreciation. The company had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow? Do not round the intermediate calculations.
Altus minerals recently reported $2850 of sales $1270 of operating costs other than depreciation and $250 of depreciation Interest expense of $70 And a tax rate of 40% How much after tax operating income does the firm have?
Scranton Shipyards has $10million of sales and $6million of operating costs including depreciation. The company has $20million of investor-supplied operating capital that has a cost of capital of 10%. What is the firm's Economic Value Added (EVA) given the company's overall tax rate of 40%?$441,000$420,000$400,000$463,050
Macon Mills is a division of Bolin Products, Inc. During the most recent year, Macon had a net income of $39 million. Included in the income was interest expense of $2,900,000. The company's tax rate was 40%. Total assets were $467 million, current liabilities were $100,000,000, and $72,000,000 of the current liabilities are noninterest bearing. What are the invested capital and ROI for Macon? Enter your answer in whole dollar. Round "ROI" answer to two decimal places. Invested Capital $fill in the blank ROI fill in the blank %
Thomson Trucking Co. has $12 billion in assets and its tax rate is 25%. The firm’s basic earning power (BEP) ratio is 10% and its ROA is 5.25%. What is the firm’s times interest earned (TIE) ratio? please show all the steps
GQ recently reported (in millions) $8,250 of sales, $5,750 of operating costs other than depreciation, and $850 of depreciation. The company had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow? Do not round the intermediate calculations.
Thomson Trucking has $12 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 10%, and its return on assets (ROA) is 5.25%. What is its times interest earned (TIE) ratio?
This year, FCF, Inc., has earnings before interest and taxes of $10 million, depreciation expenses of $1 million, capital expenditures of $1.5 million, and has increased its net working capital by $500,000. If its tax rate is 35%, what is its free cash flow?
Last year, Thurco Corporation had revenue of $120,000 and expenses of $70,000. If Thurco had $250,000 of equipment and other operating assets last year, what was Thurco’s margin?
Thomson Trucking has $15 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio is 18%, and its return on assets (ROA) is 6.25%. What is its times-interest-earned (TIE) ratio? Round your answer to two decimal places.
Shrives Publishing recently reported $11,500 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 25%. During the year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,550. These expenditures were necessary for it to sustain operations and generate future sales and cash flows. What was its free cash flow?

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