This is my problem i have to figure out can anyone talk me through this? I don't just want a answer i want to know how you come up withthe answer so i can learn from it. 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 noncash 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)?

can anyone help please

a. To find the company's net income, we need to start with the operating income (EBIT) and make adjustments for depreciation, interest expenses, and taxes.

Net Income = EBIT - Depreciation - Interest Expense - Taxes

Given:
Operating Income (EBIT) = $5 million
Depreciation = $1 million
Interest Expense = $1 million
Tax Rate = 40%

Substituting the values into the formula:

Net Income = $5 million - $1 million - $1 million - (40% * $5 million)
Net Income = $5 million - $1 million - $1 million - $2 million
Net Income = $1 million

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

b. To find the company's net cash flow, we need to consider the changes in current assets and current liabilities.

Net Cash Flow = Net Income + Depreciation - Changes in Current Assets + Changes in Current Liabilities

Given:
Net Income = $1 million
Depreciation = $1 million
Current Assets = $14 million
Non-interest bearing Current Liabilities = $4 million

Substituting the values into the formula:

Net Cash Flow = $1 million + $1 million - (Changes in Current Assets) + (Changes in Current Liabilities)

Since no specific changes in current assets and current liabilities are provided, we assume there are no changes. Therefore:

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

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

c. To find the company's net operating profit after taxes (NOPAT), we need to calculate the operating income after taxes.

NOPAT = Operating Income (EBIT) * (1 - Tax Rate)

Given:
Operating Income (EBIT) = $5 million
Tax Rate = 40%

Substituting the values into the formula:

NOPAT = $5 million * (1 - 40%)
NOPAT = $5 million * 0.6
NOPAT = $3 million

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

d. To find the company's operating cash flow, we need to consider changes in working capital.

Operating Cash Flow = NOPAT + Depreciation - Changes in Working Capital

Given:
NOPAT = $3 million
Depreciation = $1 million

Since specific changes in working capital are not provided, we assume there are no changes. Therefore:

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

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

e. To find the company's free cash flow (FCF), we need to calculate the changes in operating capital.

Free Cash Flow (FCF) = Operating Cash Flow - Changes in Operating Capital

Given:
Operating Cash Flow = $4 million
Operating Capital (previous year) = $24 million

Since the changes in operating capital are not provided, we assume there are no changes. Therefore:

FCF = $4 million - $24 million
FCF = -$20 million

The negative value indicates that the company's free cash flow is negative $20 million.

f. To find the company's Economic Value Added (EVA), we need to calculate the difference between the company's net operating profit after taxes (NOPAT) and the cost of capital.

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

Given:
NOPAT = $3 million
Cost of Capital = 10%
Operating Capital = $24 million

First, we need to calculate the cost of capital:

Cost of Capital = Cost of Capital * Operating Capital
Cost of Capital = 10% * $24 million
Cost of Capital = $2.4 million

Now, we can calculate the EVA:

EVA = $3 million - $2.4 million
EVA = $0.6 million

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