Wildhorse Co. accumulates the following cost and market data on December 31. Inventory Categories Cost Data Market Data Cameras Camcorders DVDs $10,871 $11,951 8,628 9,488 10,960 9,660 Required: Compute the lower-of-cost-or-market valuation for the company's inventory. 22:31 You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $64 million, had a tax rate of 30 percent, and its depreciation expense was $5 million. Fields and Struthers' gross fixed assets increased by $30 million from 2014 and 2015. The firm's current assets increased by $26 million and spontaneous current liabilities increased by $15 million. a. Calculate Fields and Struthers' operating cash flow for 2015. b. Calculate Fields and Struthers' investment in operating capital for 2015. c. Calculate Fields and Struthers' free cash flow for 2015. 22:31 Your firm has net income of $329 on total sales of $1,340. Costs are $740 and depreciation is $130. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow?
Wildhorse Co. accumulates the following cost and market data on December 31. Inventory Categories Cost Data Market Data Cameras Camcorders DVDs $10,871 $11,951 8,628 9,488 10,960 9,660 Required: Compute the lower-of-cost-or-market valuation for the company's inventory. 22:31 You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $64 million, had a tax rate of 30 percent, and its depreciation expense was $5 million. Fields and Struthers' gross fixed assets increased by $30 million from 2014 and 2015. The firm's current assets increased by $26 million and spontaneous current liabilities increased by $15 million. a. Calculate Fields and Struthers' operating cash flow for 2015. b. Calculate Fields and Struthers' investment in operating capital for 2015. c. Calculate Fields and Struthers' free cash flow for 2015. 22:31 Your firm has net income of $329 on total sales of $1,340. Costs are $740 and depreciation is $130. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Wildhorse Co. accumulates the following cost and market data on December 31.
Inventory Categories Cost Data Market Data
Cameras
Camcorders
DVDs
$10,871
$11,951
8,628
9,488
10,960 9,660
Required:
Compute the lower-of-cost-or-market valuation for the company's inventory.
22:31
You are considering an investment in Fields and Struthers, Inc., and want to
evaluate the firm's free cash flow. From the income statement, you see that
Fields and Struthers earned an EBIT of $64 million, had a tax rate of 30 percent,
and its depreciation expense was $5 million. Fields and Struthers' gross fixed
assets increased by $30 million from 2014 and 2015. The firm's current assets
increased by $26 million and spontaneous current liabilities increased by $15
million.
a. Calculate Fields and Struthers' operating cash flow for 2015.
b. Calculate Fields and Struthers' investment in operating capital for 2015.
c. Calculate Fields and Struthers' free cash flow for 2015.
22:31
Your firm has net income of $329 on total sales of $1,340. Costs
are $740 and depreciation is $130. The tax rate is 30 percent.
The firm does not have interest expenses. What is the operating
cash flow?
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