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)?

a. To calculate the company's net income, we need to consider the operating income (EBIT), depreciation expense, interest expense, and the applicable tax rate. The formula to calculate net income is as follows:

Net Income = EBIT - Depreciation Expense - Interest Expense - (Tax Rate * EBIT)

Given that the operating income (EBIT) is $5 million, depreciation expense is $1 million, interest expense is $1 million, and the tax rate is 40%, we can calculate the net income:

Net Income = $5 million - $1 million - $1 million - (0.40 * $5 million) = $5 million - $1 million - $1 million - $2 million = $1 million.

Therefore, the company's net income for the year is $1 million.

b. To calculate the company's net cash flow, we need to take into account the net income and any non-cash expenses. The formula to calculate net cash flow is as follows:

Net Cash Flow = Net Income + Depreciation Expense

Given that the net income is $1 million and the depreciation expense is $1 million, we can calculate the net cash flow:

Net Cash Flow = $1 million + $1 million = $2 million.

Therefore, the company's net cash flow for the year is $2 million.

c. To calculate the company's net operating profit after taxes (NOPAT), we need to consider the operating income (EBIT) and the applicable tax rate. The formula to calculate NOPAT is as follows:

NOPAT = EBIT * (1 - Tax Rate)

Given that the operating income (EBIT) is $5 million and the tax rate is 40%, we can calculate NOPAT:

NOPAT = $5 million * (1 - 0.40) = $5 million * 0.60 = $3 million.

Therefore, the company's net operating profit after taxes (NOPAT) for the year is $3 million.

d. To calculate the company's operating cash flow, we need to consider the net operating profit after taxes (NOPAT) and any non-cash expenses. The formula to calculate operating cash flow is as follows:

Operating Cash Flow = NOPAT + Depreciation Expense

Given that the NOPAT is $3 million and the depreciation expense is $1 million, we can calculate the operating cash flow:

Operating Cash Flow = $3 million + $1 million = $4 million.

Therefore, the company's operating cash flow for the year is $4 million.

e. To calculate the company's free cash flow (FCF), we need to consider the operating cash flow and the change in operating capital. The formula to calculate FCF is as follows:

FCF = Operating Cash Flow - Change in Operating Capital

Given that the operating cash flow is $4 million and the change in operating capital is the difference between the current year's operating capital and the previous year's operating capital, we need the value of the operating capital in the previous year.

If the operating capital in the previous year was $24 million, we can use the following formula:

FCF = Operating Cash Flow - (Operating Capital in the current year - Operating Capital in the previous year)

FCF = $4 million - ($24 million - $24 million) = $4 million - $0 = $4 million.

Therefore, the company's free cash flow (FCF) for the year is $4 million.

f. To calculate the company's Economic Value Added (EVA), we need to consider the net operating profit after taxes (NOPAT) and the after-tax cost of capital. The formula to calculate EVA is as follows:

EVA = NOPAT - (After-Tax Cost of Capital * Operating Capital)

Given that the NOPAT is $3 million and the after-tax cost of capital is 10%, we need the value of the operating capital.

Unfortunately, the value of the operating capital is not given in the provided information. Without that information, we cannot calculate the company's Economic Value Added (EVA).