Question

In: Finance

The 2015 income statement for Egyptian Noise Blasters shows that depreciation expense is $82 million, NOPAT...

The 2015 income statement for Egyptian Noise Blasters shows that depreciation expense is $82 million, NOPAT is $245 million. At the end of the year, the balance of gross fixed assets was $660 million. The change in net operating working capital during the year was $72 million. Egyptian’s free cash flow for the year was $190 million.

Calculate the beginning-of-year balance for gross fixed assets. (Enter your answer in millions of dollars.)

Expert Solution

We have,

Operating cash flows = NOPAT + Depreciation expense = $245 million + $82 million = $327 million

Step 1: Find Investment in operating capital:

Free cash flow = Operating cash flows – Investment in operating capital

$190 million = $327 million – Investment in operating capital

Investment in operating capital = $327 million - $190 million = $137 million

Step 2: Find change in gross fixed assets:

Investment in operating capital = Change in gross fixed assets + Change in net working capital

$137 million = Change in gross fixed assets + $72 million

Change in gross fixed assets = $137 million - $72 million

= $65 million

Step 3: Find Beginning of the year gross fixed assets :

End of the year gross fixed assets – Beginning of the year gross fixed assets = Change in gross fixed assets

End of the year gross fixed assets – Beginning of the year gross fixed assets = $65 million

$660 million - Beginning of the year gross fixed assets = $65 million

Beginning of the year gross fixed assets = $660 million - $65 million = $595 million

jeff jeffy answered 4 months ago

The 2015 income statement for Duffy’s Pest Control shows that depreciation expense was $202 million, EBIT...

The 2015 income statement for Duffy’s Pest Control shows that depreciation expense was $202 million, EBIT was $514 million, and the tax rate was 30 percent. At the beginning of the year, the balance of gross fixed assets was $1,584 million and net operating working capital was $422 million. At the end of the year, gross fixed assets was $1,836 million. Duffy’s free cash flow for the year was $427 million. Calculate the end-of-year balance for net operating working capital....

The 2018 income statement for Duffy’s Pest Control shows that depreciation expense was $193 million, EBIT...

The 2018 income statement for Duffy’s Pest Control shows that depreciation expense was $193 million, EBIT was $496 million, and the tax rate was 35 percent. At the beginning of the year, the balance of gross fixed assets was $1,566 million and net operating working capital was $413 million. At the end of the year, gross fixed assets was $1,809 million. Duffy’s free cash flow for the year was $409 million. Calculate the end-of-year balance for net operating working capital

The 2018 income statement for Duffy’s Pest Control shows that depreciation expense was $195 million, EBIT...

The 2018 income statement for Duffy’s Pest Control shows that depreciation expense was $195 million, EBIT was $500 million, and the tax rate was 36 percent. At the beginning of the year, the balance of gross fixed assets was $1,570 million and net operating working capital was $415 million. At the end of the year, gross fixed assets was $1,815 million. Duffy’s free cash flow for the year was $413 million. Calculate the end-of-year balance for net operating working capital....

The 2018 income statement for Duffy’s Pest Control shows that depreciation expense was $192 million, EBIT...

The 2018 income statement for Duffy’s Pest Control shows that depreciation expense was $192 million, EBIT was $494 million, and the tax rate was 30 percent. At the beginning of the year, the balance of gross fixed assets was $1,564 million and net operating working capital was $412 million. At the end of the year, gross fixed assets was $1,806 million. Duffy’s free cash flow for the year was $407 million. Calculate the end-of-year balance for net operating working capital.

Question: Based on the following transactions, complete this income statement: Sales: Operating Expense: Depreciation Expense: EBIT:...

Question: Based on the following transactions, complete this income statement: Sales: Operating Expense: Depreciation Expense: EBIT: Intresrest Expense: Pre-tax Income: Taxes: Net Income: Dividened: Paid to Retained Earning: 1. Earn $85,000 in sales revenue: $40,000 into Accounts Receivable and $45,000 in cash. 2. The sales require $50,000 worth of existing inventory. $20,000 of additional inventory is purchased on credit and applied to the Accounts Payable. 3. $30,000 is collected from Accounts Recievable. 4. $35,000 of the Accounts Payable is due...

A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on...

A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on sale of plant assets, $14,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses decreased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities. Select one: a. $155,000. b. $145,800. c. $141,000. d. $139,000. Please Solve As...

INCOME STATEMENT NET INCOME $ 7,945 DEPRECIATION EXPENSE $ 2,325 LOSS ON SALE OF PLANT ASSETS...

INCOME STATEMENT NET INCOME $ 7,945 DEPRECIATION EXPENSE $ 2,325 LOSS ON SALE OF PLANT ASSETS $ 375 ADDITIONAL INFO NEW PLANT ASSETS PURCHASED $ 4,250 OLD PLANT ASSETS SOLD FOR CASH $ 75 ORIGINAL COST $ 2,875 BONDS MATURED AND PAID OFF IN CASH CASH DIVIDEND PAID $2,018 INSTRUCTIONS PREPARE THE WORKSHEET FOR THE STATEMENT OF CASH FLOW. PREPARE THE ACTUAL STATEMENT OF CASH FLOWS. NOTE: If it is easier for you to just do the actual statement of...

A company's income statement showed the following: net income, $135,400; depreciation expense, $32,700, and gain on...

A company's income statement showed the following: net income, $135,400; depreciation expense, $32,700, and gain on sale of plant assets, $15,350. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $10,300; merchandise inventory increased $19,800; prepaid expenses decreased $7,100; accounts payable increased $4,000. Calculate the net cash provided or used by operating activities.

A company's income statement showed the following: net income, $126,000; depreciation expense, $36,000; and gain on...

A company's income statement showed the following: net income, $126,000; depreciation expense, $36,000; and gain on sale of plant assets, $10,000. An examination of the company's current assets and current liabilities showed the following changes accounts receivable decreased $10,600; merchandise inventory increased $24,000; prepaid expenses increased $7,400; accounts payable increased $4,600. Calculate the net cash provided or used by operating activities. Multiple Choice $176,600. $155,400. $148,600. $150,600. $135,800. In preparing a company's statement of cash flows using the indirect method,...

A company's income statement showed the following: net income, $134,000; depreciation expense, $40,000; and gain on...

A company's income statement showed the following: net income, $134,000; depreciation expense, $40,000; and gain on sale of plant assets, $14,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $11,400; merchandise inventory increased $28,000; prepaid expenses increased $8,200; accounts payable increased $5,400. Calculate the net cash provided or used by operating activities. Multiple Choice $140,600. $183,000. $157,000. $155,000. $161,800.