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
Related questions
Question
Transcribed Image Text:The following table shows an abbreviated income statement and balance sheet for
McDonald's Corporation for 2012.
INCOME STATEMENT OF MCDONALD'S CORP.,
2012
(Figures in $ millions)
Net sales
Costs
Depreciation
Earnings before interest and taxes
(EBIT)
Interest expense
Pretax income
Taxes
Net income
Assets
Current assets
Cash and marketable
securities
Receivables
Inventories
Other current assets
Total current assets
Fixed assets
Property, plant, and
equipment
Intangible assets
(goodwill)
Other long-term assets
Total assets
Additional tax
2012
BALANCE SHEET OF MCDONALD'S CORP., 2012
(Figures in $ millions)
Liabilities and Shareholders'
2,353
1,392
$
139
1,106
4,990
24,694
2,821
3,000
35,505
27,584
17,586
1,419
8,579
534
8,045
2,648
5,397
2011
2,353 Debt due for repayment
1,352 Accounts payable
equity
Current liabilities
134 Total current liabilities
633
4,472
Long-term debt
22,852 Other long-term liabilities
2,670 Total liabilities
3,116
33,110
million
Total shareholders' equity
Total liabilities and shareholders'
equity
2012
In 2012 McDonald's had capital expenditures of $3,066.
a. Calculate McDonald's free cash flow in 2012. (Enter your answer in millions.)
Free cash flow
$
million
If McDonald's was financed entirely by equity, how much more tax would the company
have paid? (Assume a tax rate of 35% on the revised pretax income.) (Do not round
intermediate calculations. Enter your answer in millions rounded to the nearest
whole number.)
2011
3,420
3,420 3,578
418
3,160
13,650
12,151
3,074 2,974
35,505
20,144 18,703
15,361
14,407
33,110
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education