The income statement for Duffy's Pest Control shows that depreciation expense was $190 million, EBIT was $490 million, and the tax rate was 34 percent. At the beginning of the year, the balance of gross fixed assets was $1,560 million and net operating working capital was $410 million. At the end of the year, gross fixed assets was $1,800 million. Duffy's free cash flow for the year was $410 million. Calculate the end-of-year balance for net operating working capital. Note: Enter your answers in millions of dollars rounded to 1 decimal place. (i.e., Enter 5,500,000 as 5.5.)
The income statement for Duffy's Pest Control shows that depreciation expense was $190 million, EBIT was $490 million, and the tax rate was 34 percent. At the beginning of the year, the balance of gross fixed assets was $1,560 million and net operating working capital was $410 million. At the end of the year, gross fixed assets was $1,800 million. Duffy's free cash flow for the year was $410 million. Calculate the end-of-year balance for net operating working capital. Note: Enter your answers in millions of dollars rounded to 1 decimal place. (i.e., Enter 5,500,000 as 5.5.)
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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Raghu Bhai
Transcribed Image Text:Problem 2-27 Free Cash Flow (LG-5)
The income statement for Duffy's Pest Control shows that depreciation expense was $190 million, EBIT was $490 million, and the tax
rate was 34 percent. At the beginning of the year, the balance of gross fixed assets was $1,560 million and net operating working
capital was $410 million. At the end of the year, gross fixed assets was $1,800 million. Duffy's free cash flow for the year was $410
million.
Calculate the end-of-year balance for net operating working capital.
Note: Enter your answers in millions of dollars rounded to 1 decimal place. (i.e., Enter 5,500,000 as 5.5.)
Net operating working capital
million
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