Problem 2-33 Free Cash Flow (LG2-5) The 2021 income statement for Duffy’s Pest Control shows that...

Problem 2-33 Free Cash Flow (LG2-5)

The 2021 income statement for Duffy’s Pest Control shows that depreciation expense was $201 million, EBIT was $512 million, and the tax rate was 30 percent. At the beginning of the year, the balance of gross fixed assets was $1,582 million and net operating working capital was $421 million. At the end of the year, gross fixed assets was $1,833 million. Duffy’s free cash flow for the year was $425 million.

Calculate the end-of-year balance for net operating working capital.

Expert Solution

jeff jeffy answered 1 year ago

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

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

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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.

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