You are considering an investment in Summit Styles, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Summit Styles earned an EBIT of $25 million, paid taxes of $4.5 million, and its depreciation expense was $8 million. Summit's gross fixed assets increased by $12 million from 2021 to 2022. The firm's current assets increased by $7 million, and its spontaneous current liabilities increased by $4 million. What are Summit Styles' operating cash flow, investment in operating capital, and free cash flow for 2022, respectively, in millions? a. $28.5 million, $15 million, $13.5 million. b. $29 million, $15 million, $14 million. c. $33.5 million, $12 million, $21.5 million. d. $33.5 million, $15 million, $18.5 million.
You are considering an investment in Summit Styles, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Summit Styles earned an EBIT of $25 million, paid taxes of $4.5 million, and its depreciation expense was $8 million. Summit's gross fixed assets increased by $12 million from 2021 to 2022. The firm's current assets increased by $7 million, and its spontaneous current liabilities increased by $4 million. What are Summit Styles' operating cash flow, investment in operating capital, and free cash flow for 2022, respectively, in millions? a. $28.5 million, $15 million, $13.5 million. b. $29 million, $15 million, $14 million. c. $33.5 million, $12 million, $21.5 million. d. $33.5 million, $15 million, $18.5 million.
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...
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Provide correct answer this general accounting question
Transcribed Image Text:You are considering an investment in Summit Styles, Inc. and want to
evaluate the firm's free cash flow. From the income statement, you see
that Summit Styles earned an EBIT of $25 million, paid taxes of $4.5
million, and its depreciation expense was $8 million. Summit's gross fixed
assets increased by $12 million from 2021 to 2022. The firm's current
assets increased by $7 million, and its spontaneous current liabilities
increased by $4 million.
What are Summit Styles' operating cash flow, investment in operating
capital, and free cash flow for 2022, respectively, in millions?
a. $28.5 million, $15 million, $13.5 million.
b. $29 million, $15 million, $14 million.
c. $33.5 million, $12 million, $21.5 million.
d. $33.5 million, $15 million, $18.5 million.
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