You are evaluating an investment in Highland Manufacturing, and want to assess the company's free cash flow. From the income statement, you see that Highland Manufacturing reported an EBIT of $75 million, had a tax rate of 24 percent, and its depreciation expense was $12 million. Highland's gross fixed assets increased by $40 million from last year to this year. The firm's current assets increased by $28 million and spontaneous current liabilities increased by $22 million. Calculate Highland Manufacturing's NOPAT.

You are evaluating an investment in Highland Manufacturing, and want to assess the company's free cash flow. From the income statement, you see that Highland Manufacturing reported an EBIT of $75 million, had a tax rate of 24 percent, and its depreciation expense was $12 million. Highland's gross fixed assets increased by $40 million from last year to this year. The firm's current assets increased by $28 million and spontaneous current liabilities increased by $22 million. Calculate Highland Manufacturing's NOPAT.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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