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…

Answered: You are considering an investment in…

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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ok You are considering an investment in Fields and Struthers, Incorporated, and want to evaluate the firm's free cash flow From the income statement, you see that Fields and Struthers earned an EBIT of $66 million, had a tax rate of 21 percent, and its depreciation expense was $5 million. Fields and Struthers's gross fixed assets increased by $32 million from last year to this year. The firm's current assets increased by $28 million and spontaneous current liabilities increased by $16 million. Calculate Fields and Struthers's NOPAT Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i.e., Enter 5,500,000 as 5.50.) NOPAT Calculate Fields and Struthers's operating cash flow Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i.e., Enter 5,500,000 as 5.50.) Operating cash flow Investment in operating capital million Calculate Fields and Struthers's investment in operating capital. Note: Enter your answer in millions of dollars. (i.e.,…
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An investment of $83 generates after-tax cash flows of $50.00 in Year 1, $72.00 in Year 2, and $125.00 in Year 3. The required rate of return is 20 percent. Find the net present value. Which of the following is not an operating activity? a. Cash receipts for interest earned. b. Cash payments for operating expenses. c. Cash collections from credit customers. d. Cash payments for dividends to shareholders. Want answer with explanation. If u give me wrong answer I will give u down vote.
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Consider the following data (be careful there might be some "unnecessary" information). EBIT = 176 Interest expense = 10 Tax rate = 30% Depreciation = 38 Net working capital = 30 Increase in net working capital = 10 Beginning of period Net PP&E = 50 Capex = 16 What is the free cash flow of the firm that year?
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Calculate it's opreting cash flow?
You have recently been hired to improve the performance of Multiplex Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year,(b) what is your Net Working Capital • Current inventory = $ 180,000.00 • Annual sales = $ 700,000.00 • Accounts receivable = $ 165,000.00 • Accounts payable = $ 85,000.00 • Total annual purchases = $ 567,000.00 • Purchases credit terms: net 30 days. • Receivables credit terms: net 50 days.
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