INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Net sales Costs Depreciation Earnings before interest and taxes (EBIT) Interest expense Pretax income Federal taxes (@ 21%) Net income $ 27,576 17,578 1,411 $ 8,587 526 8,061 1,693 $ 6,368 BALANCE SHEET OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Assets Current assets Cash and marketable securities 2022 2021 Liabilities and Shareholders' Equity Current liabilities $ 2,345 $ 2,345 Debt due for repayment Receivables Inventories Other current assets 1,384 131 1,098 1,344 126 Accounts payable Total current liabilities 625 Total current assets $ 4,958 $ 4,440 Fixed assets Property, plant, and equipment $ 24,686 2,813 2,992 2,662 Long-term debt $ 22,844 Other long-term liabilities Total liabilities 3,108 Total shareholders' equity $ 35,449 $ 33,054 Total liabilities and shareholders' equity 2022 2021 $3,412 $ 3,412 $ 394 3,152 $ 3,546 $ 13,642 3,066 $ 20,120 15,329 $ 35,449 $ 12,143 2,966 $ 18,655 14,399 $ 33,054 Intangible assets (goodwill) Other long-term assets Total assets In 2022 Quick Burger had capital expenditures of $3,058. a. Calculate Quick Burger's free cash flow in 2022. Note: Enter your answer in millions. b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.) Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. c. What would the company's free cash flow have been if it was all-equity financed? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.
INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Net sales Costs Depreciation Earnings before interest and taxes (EBIT) Interest expense Pretax income Federal taxes (@ 21%) Net income $ 27,576 17,578 1,411 $ 8,587 526 8,061 1,693 $ 6,368 BALANCE SHEET OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Assets Current assets Cash and marketable securities 2022 2021 Liabilities and Shareholders' Equity Current liabilities $ 2,345 $ 2,345 Debt due for repayment Receivables Inventories Other current assets 1,384 131 1,098 1,344 126 Accounts payable Total current liabilities 625 Total current assets $ 4,958 $ 4,440 Fixed assets Property, plant, and equipment $ 24,686 2,813 2,992 2,662 Long-term debt $ 22,844 Other long-term liabilities Total liabilities 3,108 Total shareholders' equity $ 35,449 $ 33,054 Total liabilities and shareholders' equity 2022 2021 $3,412 $ 3,412 $ 394 3,152 $ 3,546 $ 13,642 3,066 $ 20,120 15,329 $ 35,449 $ 12,143 2,966 $ 18,655 14,399 $ 33,054 Intangible assets (goodwill) Other long-term assets Total assets In 2022 Quick Burger had capital expenditures of $3,058. a. Calculate Quick Burger's free cash flow in 2022. Note: Enter your answer in millions. b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.) Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. c. What would the company's free cash flow have been if it was all-equity financed? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.
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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Transcribed Image Text:INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022
(Figures in $ millions)
Net sales
Costs
Depreciation
Earnings before interest and taxes (EBIT)
Interest expense
Pretax income
Federal taxes (@ 21%)
Net income
$ 27,576
17,578
1,411
$ 8,587
526
8,061
1,693
$ 6,368
BALANCE SHEET OF QUICK BURGER CORPORATION, 2022
(Figures in $ millions)
Assets
Current assets
Cash and marketable securities
2022
2021
Liabilities and Shareholders' Equity
Current liabilities
$ 2,345
$ 2,345
Debt due for repayment
Receivables
Inventories
Other current assets
1,384
131
1,098
1,344
126
Accounts payable
Total current liabilities
625
Total current assets
$ 4,958
$ 4,440
Fixed assets
Property, plant, and equipment
$ 24,686
2,813
2,992
2,662
Long-term debt
$ 22,844 Other long-term liabilities
Total liabilities
3,108 Total shareholders' equity
$ 35,449
$ 33,054 Total liabilities and shareholders' equity
2022
2021
$3,412
$ 3,412
$ 394
3,152
$ 3,546
$ 13,642
3,066
$ 20,120
15,329
$ 35,449
$ 12,143
2,966
$ 18,655
14,399
$ 33,054
Intangible assets (goodwill)
Other long-term assets
Total assets
In 2022 Quick Burger had capital expenditures of $3,058.
a. Calculate Quick Burger's free cash flow in 2022.
Note: Enter your answer in millions.
b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.)
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.
c. What would the company's free cash flow have been if it was all-equity financed?
Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.
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