Question 3: Study the following financial statements. What was NOWC for 2017 and 2018? Show the calculation and circle your answer. Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes. Calculate the Free Cash Flow in 2018. Show the calculation and circle your answer. What was 2018 EVA? Show the calculation and circle your answer. Assume that its after-tax cost of capital is 10%. What was MVA at the year-end 2018? Show the calculation and circle your answer. (Note: Share Price is $25)

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter2: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 12P
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Question 3: Study the following financial statements.

  1. What was NOWC for 2017 and 2018? Show the calculation and circle your answer. Assume that all

cash is excess cash; i.e., this cash is not needed for operating purposes.

  1. Calculate the Free Cash Flow in 2018. Show the calculation and circle your answer.
  2. What was 2018 EVA? Show the calculation and circle your answer. Assume that its after-tax cost of

capital is 10%.

  1. What was MVA at the year-end 2018? Show the calculation and circle your answer. (Note: Share

Price is $25)

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