General Accounting You are considering an investment in Fieldsand Struthers, Incorporated, and want toevaluate the firm's free cash flow. From theincome statement, you see that Fields andStruthers earned an EBIT of $90 million, hada tax rate of 21 percent, and its depreciationexpense was $10 million. Fields andStruthers's gross fixed assets increased by$56 million from last year to this year. Thefirm's current assets increased by $44million and spontaneous current liabilitiesincreased by $36 million.Calculate Fields and Struthers's NOPAT.

Step 1: Define Net Operating Profit After Tax (NOPAT)NOPAT is a vital financial concept that…

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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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The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
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 $90 million, had a tax rate of 21 percent, and its depreciation expense was $10 million. Fields and Struthers's gross fixed assets increased by $56 million from last year to this year. The firm's current assets increased by $44 million and spontaneous current liabilities increased by $36 million.Calculate Fields and Struthers's NOPAT
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 $62 million, had a tax rate of 21 percent, and its depreciation expense was $6 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 $24 million and spontaneous current liabilities increased by $14 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 million 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 million
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 $70 million, had a tax rate of 21 percent, and its depreciation expense was $7 million. Fields and Struthers's NOPAT gross fixed assets increased by $36 million from 2020 and 2021. The firm's current assets increased by $32 million and spontaneous current liabilities increased by $18 million. Calculate Fields and Struthers's NOPAT operating cash flow for 2021. Calculate Fields and Struthers's NOPAT investment in operating capital for 2021. Calculate Fields and Struthers's NOPAT free cash flow for 2021.
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 $88 million, had a tax rate of 21 percent, and its depreciation expense was $12 million. Fields and Struthers's NOPAT gross fixed assets increased by $54 million from 2020 and 2021. The firm's current assets increased by $42 million and spontaneous current liabilities increased by $34 million. Calculate Fields and Struthers's NOPAT operating cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.) Operating cash flow Calculate Fields and Struthers's NOPAT investment in operating capital for 2021. (Enter your answer in millions of dollars.) Investment in operating capital million Free cash flow Calculate Fields and Struthers's NOPAT free cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.) million million
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 21 percent, and its depreciation expense was $5 million. Fields and Struthers's NOPAT gross fixed assets increased by $30 million from 2020 and 2021. The firm's current assets increased by $26 million and spontaneous current liabilities increased by $15 million. Calculate Fields and Struthers's NOPAT operating cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.) Operating cash flow Calculate Fields and Struthers's NOPAT investment in operating capital for 2021. (Enter your answer in millions of dollars.) Investment in operating capital million Free cash flow Check my work million million Calculate Fields and Struthers's NOPAT free cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.)
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.,…
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 $84 million, had a tax rate of 21 percent, and its depreciation expense was $10 million. Fields and Struthers's NOPAT gross fixed assets increased by $50 million from 2020 and 2021. The firm’s current assets increased by $38 million and spontaneous current liabilities increased by $25 million. Calculate Fields and Struthers’s NOPAT operating cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.) Calculate Fields and Struthers’s NOPAT investment in operating capital for 2021. (Enter your answer in millions of dollars.) Calculate Fields and Struthers’s NOPAT free cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.)
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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.
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