Accounting You are considering an investment in Crew Cut, Inc. andwant to evaluate the firm's free cash flow. From the incomestatement, you see that Crew Cut earned an EBIT of $23.19million, paid taxes of $3.81 million, and its depreciationexpense was $7.81 million. Crew Cut's gross fixed assetsincreased by $10.19 million from 2007 to 2008. The firm'scurrent assets increased by $6.19 million and spontaneouscurrent liabilities increased by $3.81 million.What is Crew Cut's operating cash flow, investment inoperating capital, and free cash flow for 2008, respectivelyin millions?a. $23.19 million, $10.19 million, $13 million.b. $23.19 million, $11.62 million, $11.57 million.c. $27.19 million, $10.19 million, $17 million.d. $27.19 million, $12.57 million, $14.62 million.

Step 1:- Introduction to the Operating Cash FlowOperating cash flow is the net amount of cash inflow…

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 7P

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