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The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022. INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Net sales $ 27,586 Costs 17,588 Depreciation 1,421 Earnings before interest and taxes (EBIT) $ 8,577 Interest expense 536 Pretax income 8,041 Federal taxes (@ 21%) 1,689 Net income $ 6,352 BALANCE SHEET OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Assets 2022 2021 Liabilities and Shareholders' Equity 2022 2021 Current assets     Current liabilities     Cash and marketable securities $ 2,355 $ 2,355 Debt due for repayment — $ 424 Receivables 1,394 1,354 Accounts payable $ 3,422 3,162 Inventories 141 136 Total current liabilities $ 3,422 $ 3,586 Other current assets 1,108 635       Total current assets $ 4,998 $ 4,480       Fixed assets     Long-term debt $ 13,652 $ 12,153 Property, plant, and equipment $ 24,696 $ 22,854 Other long-term liabilities 3,076 2,976 Intangible assets (goodwill) 2,823 2,672 Total liabilities $ 20,150 $ 18,715 Other long-term assets 3,002 3,118 Total shareholders’ equity 15,369 14,409 Total assets $ 35,519 $ 33,124 Total liabilities and shareholders’ equity $ 35,519 $ 33,124 In 2022 Quick Burger had capital expenditures of $3,068. Calculate Quick Burger’s free cash flow in 2022. Note: Enter your answer in millions. 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. 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.

The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022. INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Net sales $ 27,586 Costs 17,588 Depreciation 1,421 Earnings before interest and taxes (EBIT) $ 8,577 Interest expense 536 Pretax income 8,041 Federal taxes (@ 21%) 1,689 Net income $ 6,352 BALANCE SHEET OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Assets 2022 2021 Liabilities and Shareholders' Equity 2022 2021 Current assets     Current liabilities     Cash and marketable securities $ 2,355 $ 2,355 Debt due for repayment — $ 424 Receivables 1,394 1,354 Accounts payable $ 3,422 3,162 Inventories 141 136 Total current liabilities $ 3,422 $ 3,586 Other current assets 1,108 635       Total current assets $ 4,998 $ 4,480       Fixed assets     Long-term debt $ 13,652 $ 12,153 Property, plant, and equipment $ 24,696 $ 22,854 Other long-term liabilities 3,076 2,976 Intangible assets (goodwill) 2,823 2,672 Total liabilities $ 20,150 $ 18,715 Other long-term assets 3,002 3,118 Total shareholders’ equity 15,369 14,409 Total assets $ 35,519 $ 33,124 Total liabilities and shareholders’ equity $ 35,519 $ 33,124 In 2022 Quick Burger had capital expenditures of $3,068. Calculate Quick Burger’s free cash flow in 2022. Note: Enter your answer in millions. 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. 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
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
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The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022.

INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022
(Figures in $ millions)
Net sales $ 27,586
Costs 17,588
Depreciation 1,421
Earnings before interest and taxes (EBIT) $ 8,577
Interest expense 536
Pretax income 8,041
Federal taxes (@ 21%) 1,689
Net income $ 6,352
BALANCE SHEET OF QUICK BURGER CORPORATION, 2022
(Figures in $ millions)
Assets 2022 2021 Liabilities and Shareholders' Equity 2022 2021
Current assets     Current liabilities    
Cash and marketable securities $ 2,355 $ 2,355 Debt due for repayment — $ 424
Receivables 1,394 1,354 Accounts payable $ 3,422 3,162
Inventories 141 136 Total current liabilities $ 3,422 $ 3,586
Other current assets 1,108 635      
Total current assets $ 4,998 $ 4,480      
Fixed assets     Long-term debt $ 13,652 $ 12,153
Property, plant, and equipment $ 24,696 $ 22,854 Other long-term liabilities 3,076 2,976
Intangible assets (goodwill) 2,823 2,672 Total liabilities $ 20,150 $ 18,715
Other long-term assets 3,002 3,118 Total shareholders’ equity 15,369 14,409
Total assets $ 35,519 $ 33,124 Total liabilities and shareholders’ equity $ 35,519 $ 33,124

In 2022 Quick Burger had capital expenditures of $3,068.

  1. Calculate Quick Burger’s free cash flow in 2022.

    Note: Enter your answer in millions.

  2. 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.

  3. 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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