managers in an... | bartleby CENGAGE M bartleby.com Assignment 03 - Financial Statements, Cash Flow, and Taxes TTIC CasiT TIOW avallabic TOT UISCITDULION CO all ITVCScors arccI ITC COITmpany mas mauc ar VCSITICIICS IT IXCU assets and working capital necessary to sustain a firm's ongoing operations Suppose you are the only owner of a chain of coffee shops near universities. Your current cafes are doing well, but you are interested in starting a fine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financial performance: Financial update as of June 15 • Your existing business generates $135,000 in EBIT. • The corporate tax rate applicable to your business is 35%. • The depreciation expense reported in the financial statements is $25,714. •You don't need to spend any money for new equipment in your existing cafes; however, you do need $20,250 of additional cash, You also need to purchase $10,800 in additional supplies-such as cloth tableclothes and TED napkins, and more formal tableware-on credit. DAYS • It is also estimated that your accruals, including taxes and wages payable, will increase by $6,750, in free cash flow. Based on your evaluation you have to your er your Can a company have negative free cash flow? No O Yes Assignment 03 - Financial Statements, Cash Flow, and Taxes ITIACO Tnauc ailIIVESCITICIICS C COITTPaily Tias TIC CASL TIUW dV QllaDIC TOI UIstiTVULIVIT LO allITVeStors aiLei LiT assets and working capital necessary to sustain a firm's ongoing operations Suppose you are the only owner of a chain of coffee shops near universities. Your current cafes are doing well, but you are interested in starting a fine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financial performance: Financial update as of June 15 • Your existing business generates $135,000 in EBIT. • The corporate tax rate applicable to your business is 35%. • The depreciation expense reported in the financial statements is $25,714. You don't need to spend any money for new equipment in your existing cafes; however, you do need $20,250 of additional cash. • You also need to purchase $10,800 in additional supplies-such as cloth tableclothes and napkins, and more formal tableware-on credit. It is also estimated that your accruals, including taxes and wages payable, will increase by $6,750. Based on your evaluation you have bur in free cash flow. $180,964 $104,014 $120,214 $99,964 Can a company have negative free No Yes