Homework Help: INB

Posted by baby on Sunday, July 29, 2007 at 1:15pm.

Last year Rattner Robotics had $5 million in operating income (EBIT). The company had net depreciation expense of $1 million and interest expense of $1 million; its corporate tax rate was 40 percent. The company has $14 million in current assets and $4 million in non-interest-bearing current liabilities; it has $15 million in net plant and equipment. It estimates that it has an after-tax cost of capital of 10 percent. Assume that Rattner’s only non-cash item was depreciation.

a. What was the company’s net income for the year?
b. What was the company’s net cash flow?
c. What was the company’s net operating profit after taxes (NOPAT)?
d. What was the company’s operating cash flow?
e.If operating capital in the previous year was $24 million what was the company’s free cash flow (FCF) for the year?
f. What was the company’s Economic Value Added (EVA)?

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