Question: Bailey Corporation recently reported the following income statement (dollars are in thousands): Sales................................................................................. $14,000,000 Operating costs excluding depreciation and amortization.......................7,000,000 EBITDA..............................................................................$ 7,000,000 Depreciation and amortization......................................................3,000,000

Bailey Corporation recently reported the following income statement (dollars are in thousands):

Sales................................................................................. $14,000,000

Operating costs excluding depreciation and amortization.......................7,000,000

EBITDA..............................................................................$ 7,000,000

Depreciation and amortization......................................................3,000,000

EBIT................................................................................ $ 4,000,000

Interest.................................................................................1,500,000

EBT.................................................................................. $ 2,500,000

Taxes........................................................................... (40%) 1,000,000

Net income.......................................................................... $ 1,500,000

Bailey's total operating capital is $20 billion and its after-tax cost of capital is 10 percent.

Therefore, Bailey's total after-tax dollar cost of operating capital is $2 billion. During the past year, Bailey made a $1.3 billion net investment in its operating capital.

a. What is Bailey's NOPAT for the year?

b. What is Bailey's net cash flow for the year?

c. What is Bailey's operating cash flow for the year?

d. What is Bailey's free cash flow for the year?

e. What is Bailey's EVA for the year?

Step by Step Solution

★★★★★

3.48 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a NOPAT b Net Cash flows EBIT 1 Tax rate 4000000000 140 2400000000 Net income Depre... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

996-B-A-G-F-A (9909).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Bailey Corporation's financial statements (dollars and shares are in millions) are provided here. Income Statement for Year Ending December 31, 2015...

Bailey Corporation's financial statements (dollars and shares are in millions) are provided here. Income Statement for Year Ending December 31, 2012...

The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2011 ($ in 000s): sales revenue, $15,300; cost of...

Could you please use third spreadsheetThank you very much. PestGo Ltd develops and sells pest management products and services to residential and commercial customers. The company recently spent $10...

Protecto Corporation purchased 80 percent of Strand Company's outstanding shares on January 1, 20x1, for $44,800 more than book value. At that date, the fair value ofthe noncontrolling interest was...

1 5.88 pts Two products emerge from a joint process. What would be the financial impact if a product is processed further and sold (instead if being sold at the split-off point)? Product has been...

Prepare the Statement of Comprehensive Income for the year ended 28 February 2019. (34) NOTE: Please show all your calculations. PANINI MACOY SOLE TRADER Information extracted from the Pre-adjustment...

You are required to: 1.1 Prepare the Statement of Comprehensive Income for the year ended 28 February 2019. (34) NOTE: Please show all your calculations. PANINI MACOY SOLE TRADER Information...

Hello there, I need help with my project and homework assignments. Please see attached templates and work problems for more details. Problem 9-4: Traditional WACC Valuation Given Solution Legend Debt...

Please use the provided template to solve the problem and please show work / formula of working cell. Please use the provided template to solve the problem and please show work / formula of working...

Northeastern Tell wants its name imprinted on the telephone set. Its Mexican supplier has quoted a price of $31.00 per set. Southwestern Ringer will have to buy a stamping machine at a net cost of...

Calculate the molar solubility of silver bromide, AgBr, in 5.0 M NH3.

Keller Construction is considering two new investments. Project E calls for the purchase of earth-moving equipment. Project H represents the investment in a hydraulic lift. Keller wishes to use a NPV...

Are rewards allocated fairly in your organization? How does this influence employee comparative assessment?

Would the yield spread on a corporate bond over a Treasury bond with the same maturity tend to become wider or narrower if the economy appeared to be heading toward a recession? Would the change in...

A bonds expected return is sometimes estimated by its YTM and sometimes by its YTC. Under what conditions would the YTM provide a better estimate, and when would the YTC be better?

Callaghan Motors bonds have 10 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 8%, and the yield to maturity is 9%. What is the bonds...

Suppose you want to hedge a $330 million bond portfolio with a duration of 5.5 years using 10-year Treasury note futures with a duration of 7 years, a futures price of 107, and 9 months to...

Can you explain it step by step please

Explain this statement: "It may be better to target one competitor in many countries than many competitors in a few countries." Why is this the case? Explain this statement: "It may be better to...