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 $88 million, had a tax rate of 21 percent, and its depreciation expense was $12 million. Fields and Struthers's gross fixed assets increased by $54 million from last year to this year. The firm's current assets increased by $42 million and spontaneous current liabilities increased by $34 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.) 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.) Calculate Fields and Struthers's investment in operating capital. Note: Enter your answer in millions of dollars. (i. e., Enter 10,000,000 as 10.) Calculate Fields and Struthers's free cash flow. Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i. e., Enter 5, 500,000 as 5.50.)
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 $88 million, had a tax rate of 21 percent, and its depreciation expense was $12 million. Fields and Struthers's gross fixed assets increased by $54 million from last year to this year. The firm's current assets increased by $42 million and spontaneous current liabilities increased by $34 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.) 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.) Calculate Fields and Struthers's investment in operating capital. Note: Enter your answer in millions of dollars. (i. e., Enter 10,000,000 as 10.) Calculate Fields and Struthers's free cash flow. Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i. e., Enter 5, 500,000 as 5.50.)
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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Transcribed Image Text: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 $88 million, had a tax rate of 21
percent, and its depreciation expense was $12 million. Fields and Struthers's gross fixed assets increased by $54 million
from last year to this year. The firm's current assets increased by $42 million and spontaneous current liabilities increased
by $34 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.)
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.)
Calculate Fields and Struthers's investment in operating capital.
Note: Enter your answer in millions of dollars. (i. e., Enter 10,000,000 as 10.)
Calculate Fields and Struthers's free cash flow.
Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i. e., Enter 5, 500,000 as 5.50.)
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