TASK 1 .

J Crew Income Projections 2011 - 2015 ($M)
		2011		2012		2013		2014		2015
Revenue		1,955		2,208		2,487		2,783		3,096
Gross Profit Margin (%)		44.4		44.5		44.5		44.7		45.1
Capital Expenditures		85		101		68		68		66
EBITDA		335		381		434		495		563
EBIT		279		319		369		427		494
Depreciation Expense		56		62		66		69		70
Increase in NWC		15		15		15		15		15

J Crew has $55M of interest-bearing long-term debt and cash balances of $142.7M. Assuming a 35% tax rate, what is J Crews (unleveraged) free cash flows (FCF) for 2013?

FCF = OCF - Capital expenditures - change in NWC ________________________

2,. Al has a positive net income and a marginal tax rate of 21 percent. Given this, a decrease in which one of the following will cause the operating cash flow to increase?

Group of answer choices

A.Depreciation

B.Cost of goods sold

C.Net working capital

D.retained earnings