Calculate Fields and Struthers's investment in operating capital.Note: Enter your answer in millions of dollars. (i.e., Enter 10,000,000 as 10.)Investment in operating capitalmillionCalculate Fields and Struthers's free cash flow.Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i.e., Enter 5,500,000 as 5.50.)Free cash flowmillion You are considering an investment in Fields and Struthers, Incorporated, and want to evaluate the firm's free cash flow. From theincome statement, you see that Fields and Struthers earned an EBIT of $62 million, had a tax rate of 21 percent, and its depreciationexpense was $6 million. Fields and Struthers's gross fixed assets increased by $32 million from last year to this year. The firm's currentassets increased by $24 million and spontaneous current liabilities increased by $14 million.Calculate Fields and Struthers's NOPAT.Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i.e., Enter 5,500,000 as 5.50.)NOPATmillionCalculate Fields and Struthers's operating cash flow.Note: Enter your answer in millions of dollars rounded to 2 decimal places. (i.e., Enter 5,500,000 as 5.50.)Operating cash flowmillion

Operating cash flow is the cash flow available in the company after doing payments for all necessary…

Answered: te Fields and St ers's inve ent…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $70 million, had a tax rate of 21 percent, and its depreciation expense was $7 million. Fields and Struthers's NOPAT gross fixed assets increased by $36 million from 2020 and 2021. The firm's current assets increased by $32 million and spontaneous current liabilities increased by $18 million. Calculate Fields and Struthers's NOPAT operating cash flow for 2021. Calculate Fields and Struthers's NOPAT investment in operating capital for 2021. Calculate Fields and Struthers's NOPAT free cash flow for 2021.
You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $84 million, had a tax rate of 21 percent, and its depreciation expense was $10 million. Fields and Struthers's NOPAT gross fixed assets increased by $50 million from 2020 and 2021. The firm’s current assets increased by $38 million and spontaneous current liabilities increased by $25 million. Calculate Fields and Struthers’s NOPAT operating cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.) Calculate Fields and Struthers’s NOPAT investment in operating capital for 2021. (Enter your answer in millions of dollars.) Calculate Fields and Struthers’s NOPAT free cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.)
You have been asked to value Brilliant Enterprises, a publicly traded IT services firm, and have collected the following information: After-tax operating income last year = $100 million Net income last year = $82.5 million Book value of equity at start of this year = $750 million Book value of debt at start of this year = $250 million Capital expenditure last year = $80 million Depreciation last year = $30 million Increase in non-cash working capital last year = $10 million a) Assuming that Brilliant Enterprises will maintain its return on capital and reinvestment rate from last year for the next 3 years, estimate the free cash flow for the company for each of the next 3 years. b) After year 3, Brilliant expects its growth rate to decline to 3% and the return on capital to be 9% in perpetuity. Assuming that its cost of capital is 8%, estimate the terminal value at the end of the third year. c) Assuming that Brilliant has a cost of capital of 10% for the next 3…
Last year, Sharpe Radios had net operating profit after-taxes (NOPAT) of $7.8 million. Its EBITDA was $15.5 million and net income amounted to $3.8 million. During the year, Sharpe Radios made $5.5 million in net capital expenditures (that is, capital expenditures net of depreciation). Finally, Sharpe Radios’ finance staff has concluded that the firm’s total after-tax capital costs were $5.9 million and its tax rate was 40 percent.a. What is Sharpe Radios’ free cash flow?b. What is Sharpe Radios’ EVA?
This year, FCF, Inc., has earnings before interest and taxes of $10 million, depreciation expenses of $1 million, capital expenditures of $1.5 million, and has increased its net working capital by $500,000. If its tax rate is 35%, what is its free cash flow?
This year, FCF Inc. has earnings before interest and taxes of $9,630,000, depreciation expenses of $1,200,000, capital expenditures of $1,700,000, and has increased its net working capital by $600,000. If its tax rate is 35%, what is its free cash flow?
The Hasting Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. Year 1: net income $13 million, Profitable Capital Expenditure $7 million Year 2 : net income 20 million profitable capital expenditure 12 million Year 3: net income 18 million profitable capital expenditure 6 million Year 4: net income 14 million profitable capital expenditure 8 million Year 5: net income 19 million profitable capital expenditure 9 million The Hastings Corporation has 3 million shares outstanding. If the firm simply uses a payout ratio of 20% net income, how much in total cash dividends will be paid? if the firm pays a 20% stock dividend in years 2 through 5, and also pays a cash dividend of $3.40 per share for each of the five years, how much in total dividends will be paid? Assume the payout ratio in each…
The Netflix Corporation's cash flow from operations before interest and taxes was $5.25 milion in the year just ended, and it expects that this will grow by 6.5% per year for six years and 5.75% per year in perpetuity. To make this happen, the firm will have to invest an amount equal to 25% of pretax cash flow each year. The tax rate is 21%. Depreciation was $275,000 in the year just ended and is expected to grow at the same rate as the opening cash flow. The apropriate market capitalization rate for the unleveraged cash flow is 13.25% per year, and the firm currently has debt of $5.75 million outstanding and 4,250,000 shares outstanding. Use the free cash flow approach to calculate the price per share.
A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to continue in perpetuity. The company has a cost of equity of 10%, a before tax cost of debt of 5% and an after tax weighted average cost of capital of 8% per year. Corporation tax is 20%. What is the theoretical value of the company?
Assume Lasher’s Kitchen has pretax earnings of $150,000 after depreciation expense of $30,000. If the firm’s tax rate is 25 percent, what is its cash flow from operations? Round your answer to the nearest dollar. $

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