HW 5 (due on Wednesday, December Tuesday, December 8, at 11:59 pm). For all questions, please feel free to use Excel. Please write down the relevant formulas and explanations. You do not need to show your Excel work.

1. Grade Manufacturing started operations on December 31, 2020, acquiring a new facility for a total of $500 million. Below are financial statements for 2020 and 2021 in millions of dollars. What is Grade's Free Cash Flow in 2021?

				2020	2021
Income Statement
Revenue					500
Operating Costs				300
Depreciation					40
Earnings Before Interest and Taxes			160
Taxes					64
EBIAT					96
Balance Sheet
Accounts Receivable			0	85
Inventory				0	90
Current Assets			0	175
Gross Property, Plant, and Equipment		360	480
Less: Accumulated Depreciation		0	40
Net Property, Plant, and Equipment		360	440
Total Assets				360	615
Accounts Payable			0	40
Equity				360	456
Total Liabilities and Equity		360	496

NOTE: Assume that Net Working Capital = Accounts Receivable + Inventory - Accounts Payable. (3 points)