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)?

"I'm tempted to solve these for you, but I think you must do your homework for you to learn. I'll just give you these formulas to help you:

1. Net income = EBIT - (taxes + interest expense)
2. Cash Flow After Tax = Net income + Depreciation + amortization + non-cash charges
3. NOPAT = EBIT x (1 - Tax Rate)
4. Operating Cash Flow = EBIT + depreciation - taxes
5. Free cash flow = net income + amortization + depreciation - changes in working capital - capital expenses
*changes in working capital would be operating capital this year less the operating capital in the previous year.
6. EVA = NOPAT - (capital * cost of capital)"

unsure, can someone please assist asap?

Thanks so much

a. To find the net income, we need to deduct the taxes from the operating income:

Operating Income (EBIT) = $5 million
Tax rate = 40%

Net Income = Operating Income – Taxes
= $5 million - ($5 million x 0.4)
= $5 million - $2 million
= $3 million

Therefore, the company's net income for the year was $3 million.

b. To find the net cash flow, we need to add back the non-cash expenses (depreciation) to the net income:

Net Cash Flow = Net Income + Depreciation
= $3 million + $1 million
= $4 million

Therefore, the company's net cash flow for the year was $4 million.

c. Net Operating Profit After Taxes (NOPAT) is calculated by subtracting taxes from the operating income:

NOPAT = Operating Income - Taxes
= $5 million - ($5 million x 0.4)
= $5 million - $2 million
= $3 million

Therefore, the company's NOPAT for the year was $3 million.

d. Operating Cash Flow can be calculated using the formula:

Operating Cash Flow = NOPAT + Depreciation
= $3 million + $1 million
= $4 million

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

e. Free Cash Flow (FCF) can be calculated using the formula:

FCF = Operating Cash Flow - Net Capital Expenditures
= Operating Cash Flow - (Net Plant and Equipment - Depreciation)
= $4 million - ($15 million - $1 million)
= $4 million - $14 million
= -$10 million

Since the result is negative, it implies that the company had negative free cash flow of $10 million for the year.

f. Economic Value Added (EVA) can be calculated using the formula:

EVA = NOPAT - (Capital * Cost of Capital)
= $3 million - ($24 million x 0.1)
= $3 million - $2.4 million
= $0.6 million

Therefore, the company's Economic Value Added (EVA) for the year was $0.6 million.

To find the answers to the given questions, we will use the following formulas and information:

1. Net Income = Operating Income - Taxes
2. Net Cash Flow = Net Income + Depreciation
3. NOPAT = Operating Income * (1 - Tax Rate)
4. Operating Cash Flow = NOPAT + Depreciation
5. Operating Capital = Current Assets - Current Liabilities
6. FCF = Operating Cash Flow - (Net Capital Expenditure + Change in Operating Capital)
7. EVA = NOPAT - (Net Capital Employed * Cost of Capital)

Given information:
- Operating Income (EBIT): $5 million
- Net Depreciation Expense: $1 million
- Interest Expense: $1 million
- Tax Rate: 40%
- Current Assets: $14 million
- Non-interest-bearing Current Liabilities: $4 million
- Net Plant and Equipment: $15 million
- After-tax Cost of Capital: 10%
- Previous year's Operating Capital: $24 million

Let's calculate the answers to each question:

a. Net Income:
Net Income = Operating Income - Taxes
Taxes = Tax Rate * Operating Income
Taxes = 0.4 * $5 million = $2 million
Net Income = $5 million - $2 million = $3 million

b. Net Cash Flow:
Net Cash Flow = Net Income + Depreciation
Net Cash Flow = $3 million + $1 million = $4 million

c. NOPAT:
NOPAT = Operating Income * (1 - Tax Rate)
NOPAT = $5 million * (1 - 0.4) = $3 million

d. Operating Cash Flow:
Operating Cash Flow = NOPAT + Depreciation
Operating Cash Flow = $3 million + $1 million = $4 million

e. Free Cash Flow (FCF):
To calculate FCF, we need to determine Net Capital Expenditure and change in Operating Capital.

Net Capital Expenditure = Change in Net Plant and Equipment
Net Capital Expenditure = $15 million - $0 million (assuming no change in plant and equipment)
Net Capital Expenditure = $15 million

Change in Operating Capital = Current Assets - Current Liabilities
Change in Operating Capital = $14 million - $4 million = $10 million

FCF = Operating Cash Flow - (Net Capital Expenditure + Change in Operating Capital)
FCF = $4 million - ($15 million + $10 million) = -$21 million

f. Economic Value Added (EVA):
Net Capital Employed = Operating Capital in the previous year + Net Plant and Equipment
Net Capital Employed = $24 million + $15 million = $39 million

EVA = NOPAT - (Net Capital Employed * Cost of Capital)
EVA = $3 million - ($39 million * 0.1) = $3 million - $3.9 million = -$0.9 million

Therefore:
a. The company's net income for the year is $3 million.
b. The company's net cash flow is $4 million.
c. The company's net operating profit after taxes (NOPAT) is $3 million.
d. The company's operating cash flow is $4 million.
e. The company's free cash flow (FCF) for the year is -$21 million.
f. The company's Economic Value Added (EVA) is -$0.9 million.