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1 Vasudevan Inc. recently reported operating income of $2.75 million, depreciation of $1.20 million, and had...

1 Vasudevan Inc. recently reported operating income of $2.75 million, depreciation of $1.20 million, and had a tax rate of 40%. The firm's expenditures on fixed assets and net operating working capital totaled $0.6 million. How much was its free cash flow, in millions?

a.

$2.25
b.

$2.03
c.

$1.93
d.

$2.14
e.

$2.36

2.

AT&T would like to improve their ROE to 15%. They think they can maintain profit margin of 11% while maintaining their total asset turnover at 0.45. What total debt to total asset ratio would be needed to achieve AT&T’s ROE goal? Assume total assets = total invested capital.

a.

60%
b.

58%
c.

67%
d.

40%
e.

33%

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Expert Solution

jeff jeffy answered 2 years ago
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