2-11Free Cash FlowFinancial information on Marine Tech Corporation is presented below. During the year,Marine Tech made a net investment in operating capital of $30 million. If the company'sshare price is $22, it has 10 million shares outstanding, and its tax rate is 30%, does MarineTech have sufficient free cash flow to repurchase 10% of its shares?Marine Tech Corporation Income StatementSalesOperating costsDepreciationEBITInterest expenseEarnings before taxTax (30%)Earnings after tax($ M)$3202202080107021$49 1. A company makes snowboards that retail at $1250. The company offers chained discounts of30% and 5% to its retailers.a. Calculate the price a retailer would pay for the snowboards.b. What single discount (single equivalent discount) is equivalent to these two discounts.C. What is the percent markup of the retailers.d. Due to a slowdown in sales the manufacturer would like to increase the total discountgiven to its retailers to 40%. What additional chained discount must they offer?

Free cash flow is calculated to measure the financial performance of a company. It is calculated by…

Answered: share price is $22, it has 10 million…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The present value of JECK Co.’s expected free cash flows is $100 million. If JECK has $30 million in debt, $6 million in cash, and 2 million shares outstanding, what is its share price?

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share price is $22, it has 10 million shares outstanding, and its tax rate is 30%, does Marine Tech have sufficient free cash flow to repurchase 10% of its shares?