
a.
To determine: The net operating working capital for 2018 and 2019.
Statement of Cash Flow: It is a part of financial statements that are included in the annual report of a company. It reports the cash generated or used by the business in a specified period.
Cash Flow from Operating Activities: The cash generated over and above required business operations is called and reported as cash flow from operating activities. Statement of cash flow reports the net cash flow generated or consumed by the business.
a.

Answer to Problem 14P
The net operating working capital for 2018 is $42,000 and 2019 is $50,220.
Explanation of Solution
Determine the net operating working capital for 2018:
Therefore the net operating working capital for 2018 is $42,000.
Determine the net operating working capital for 2019:
Therefore the net operating working capital for 2019 is $50,220.
b.
To determine: The
b.

Answer to Problem 14P
The free cash flow in 2019 for Company A is $22,780.
Explanation of Solution
Determine the free cash flow in 2019 for Company A:
Therefore, the free cash flow in 2019 for Company A is $22,780.
c.
To determine: The statement of
c.

Explanation of Solution
The statement of stockholders equity for Company as on 2019 is as follows:
Excel Spreadsheet:
Excel Spreadsheet Workings:
d.
To determine: The EVA of Company A for 2019.
d.

Answer to Problem 14P
The EVA of Company A for 2019 is $21,678.
Explanation of Solution
Determine the EVA of Company A for 2019:
Therefore, the EVA of Company A for 2019 is $21,678.
e.
To determine: The MVA of Company A for 2019.
e.

Answer to Problem 14P
The MVA of Company A for 2019 is $13,780.
Explanation of Solution
Determine the MVA of Company A for 2019:
Therefore, the MVA of Company A for 2019 is $13,780.
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Chapter 3 Solutions
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
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