Here are the balance sheets as given in the problem: Cumberland Industries December 31 Balance Sheets (in thousands of dollars)

a. The company's 2007 sales were $455,150,000, and EBITDA was 15 percent of sales. Furthermore, depreciation amounted to 11 percent of net fixed assets, interest charges were $8,575,000, the state-plus-federal corporate tax rate was 40 percent, and Cumberland pays 40 percent of its net income out in dividends. Given this information, construct Cumberland's 2007 income statement.
b. Next, construct the firm's statement of retained earnings for the year ending December 31, 2007, and then its 2007 statement of cash flows.
c. Calculate net operating working capital, total net operating capital, net operating profit after taxes, operating cash flow, and free cash flow for 2007.
d. Calculate the firm's EVA and MVA for 2007. Assume that Cumberland had 10 million shares outstanding, that the year-end closing stock price was $17.25 per share, and its after-tax cost of capital was 12percent.

2007 2006 Assets Cash and cash equivalents Short-term investments Accounts Receivable Inventories S91.450 S74,625 S11,400 S15,100 S103,365 S85,527 $38.444 S34.982 Total current assets 65 Net fixed assets Total assets S67,165 S42.436 Liabilities and equity Accounts payable Accruals Notes payable S30,76 S23,109 S30.477 S22.656 S16,717 S14,217 3 Total current iabilities Long-term debt $76.264 S63.914 Total liabilities S100,000 S90,000 S57,65 S38,774 9 Retained Earnings Total common equity Total liabilities and equity