CA NFA

5100 23800

TA

28900

SALES COSTS DEPRE EBIT INTEREST EBT TAXES NI

TAXES

AVG TAX RATE

NET INCOME

NI EBT-T=NI EBT(1-t)=NI EBT(0.65)=6600 EBT INTEREST EBIT EBIT=SALES-COST-DEPRE

14564=41000-19500-DEPRICIATION DEPRICIATION=6936

INCOME STATEMENT SALES COSTS DEPRE EBIT INTERSET EBT TAXES(@34%) NI

OCF=EBIT+DEPRE-TAXES 2700+4050-296

NET CAPITAL SPENDING NFAEND=NFAB+DEPR 16800-13650+4050

CHANGE IN NWC

NWC(END)-NWC(BEGIN) (CAEND-CLEND)-(CABEHIN-CLBEGIN (5930-3150)-(4800-2700) 2780-2100=680

CASH FLOW FROM ASSETS=OCF-NET

6456-680-7200

THE CASH FLOW FROM ASSETS CAN BE POSITIVE O

CASH FLOW TO CREDITORS=INTERE

CASH FLOW TO STAKEHOLDERS=CAS

THE FIRM HAS POSITIVE EARNING IN

balance sheet

CL LTD OE TL&OE

4300 7400 17200 28900

INCOME STATEMENT 586000 247000 43000 296000 32000 264000 92400 171600

0.15(50)+0.25(25)+0.34(25)+(236000-100000)*0.39

TOTAL TAXES AVG TAX RATE TOTAL TAXES/TOTAL TAXABLE INCOME

DIV+RE

6600

EBT(0.65)=6600 10154 4500 14654 EBIT=SALES-COST-DEPRE

14564=41000-19500-DEPRICIATION DEPRICIATION=6936

INCOME STATEMENT 22800 16050 4050 2700 1830 870 296 574

OCF=EBIT+DEPRE-TAXES 2700+4050-296 6454 NET CAPITAL SPENDING NFAEND=NFAB+DEPR 16800-13650+4050

7200 CHANGE IN NWC NWC(END)-NWC(BEGIN) (CAEND-CLEND)-(CABEHIN-CLBEGIN) (5930-3150)-(4800-2700) 2780-2100=680

CASH FLOW FROM ASSETS=OCF-NET CAPITAL SPENDING-CHANGE IN NWC

6456-680-7200

SH FLOW FROM ASSETS CAN BE POSITIVE OR NEGATIVE SINCE IT REPRESENTS WHETHER THE FIRM RAISED FUNDS OR DISTRIBUTED FUNDS

CASH FLOW TO CREDITORS=INTEREST -NET NEW LTD CASH FLOW TO STAKEHOLDERS=CASH FLOW FROM ASSETS-CASH FLOW TO CREDITORS

THE FIRM HAS POSITIVE EARNING IN POSITIVE INCOME AS NI IS GREATER THAN ZERO AND POSITIVE OCF.THE FIRM INVESTED $680 I

M RAISED FUNDS OR DISTRIBUTED FUNDS ON A NET BASIS.IN THIS PROBLEM EVEN THOUGH NET INCOME AND OCF ARE POSITIVE THE FIRM

POSITIVE OCF.THE FIRM INVESTED $680 IN NWC AND 7200 IN NFA.THE FIRM HAS TO RAISE 1426 FROM ITS STAKEHOLDERS TO SUPPORT T

INCOME AND OCF ARE POSITIVE THE FIRM INVESTED HEAVILY I BOTH FIXED ASSETS AND NET WORKING CAPITAL.IT HAS TO RAISE A NET O

6 FROM ITS STAKEHOLDERS TO SUPPORT THIS NEW INVESTMENT.IT ACCOMPLISH THIS BY RACING 44556 IN FORM OF NEW EQUITY

ORKING CAPITAL.IT HAS TO RAISE A NET OF DOLLAR 1426 IN FUNDS FROM ITS STAKEHOLDERS

G 44556 IN FORM OF NEW EQUITY