The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for...
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The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022. INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022 Net sales Costs Depreciation (Figures in $ millions) Earnings before interest and taxes (EBIT) Interest expense Pretax income $ 27,572 17,574 1,407 $ 8,591 522 8,069 Federal taxes (@ 21%) Net income 1,694 $ 6,375 BALANCE SHEET OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Assets Current assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Fixed assets Property, plant, and equipment Intangible assets (goodwill) Other long-term assets Total assets 2022 2021 Liabilities and Shareholders' Equity Current liabilities 2022 2021 $ 2,341 1,380 127 1,094 $ 4,942 $ 2,341 Debt due for repayment 1,340 Accounts payable 122 Total current liabilities $ 3,408 $ 3,408 $ 382 3,148 $ 3,530 621 $ 4,424 Long-term debt $ 24,682 2,809 2,988 $ 22,840 Other long-term liabilities 2,658 Total liabilities 3,104 Total shareholders' equity $ 35,421 $ 33,026 Total liabilities and shareholders' equity $ 13,638 3,062 $ 20,108 15,313 $ 35,421 $ 12,139 2,962 $ 18,631 14,395 $ 33,026 In 2022 Quick Burger had capital expenditures of $3,054. a. Calculate Quick Burger's free cash flow in 2022. Note: Enter your answer in millions. b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.) Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. c. What would the company's free cash flow have been if it was all-equity financed? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number. Answer is complete but not entirely correct. a. Free cash flow $ 4,728 million b. Additional tax $ 109.62 million c. Free cash flow $ 4,728 million The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022. INCOME STATEMENT OF QUICK BURGER CORPORATION, 2022 Net sales Costs Depreciation (Figures in $ millions) Earnings before interest and taxes (EBIT) Interest expense Pretax income $ 27,572 17,574 1,407 $ 8,591 522 8,069 Federal taxes (@ 21%) Net income 1,694 $ 6,375 BALANCE SHEET OF QUICK BURGER CORPORATION, 2022 (Figures in $ millions) Assets Current assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Fixed assets Property, plant, and equipment Intangible assets (goodwill) Other long-term assets Total assets 2022 2021 Liabilities and Shareholders' Equity Current liabilities 2022 2021 $ 2,341 1,380 127 1,094 $ 4,942 $ 2,341 Debt due for repayment 1,340 Accounts payable 122 Total current liabilities $ 3,408 $ 3,408 $ 382 3,148 $ 3,530 621 $ 4,424 Long-term debt $ 24,682 2,809 2,988 $ 22,840 Other long-term liabilities 2,658 Total liabilities 3,104 Total shareholders' equity $ 35,421 $ 33,026 Total liabilities and shareholders' equity $ 13,638 3,062 $ 20,108 15,313 $ 35,421 $ 12,139 2,962 $ 18,631 14,395 $ 33,026 In 2022 Quick Burger had capital expenditures of $3,054. a. Calculate Quick Burger's free cash flow in 2022. Note: Enter your answer in millions. b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.) Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. c. What would the company's free cash flow have been if it was all-equity financed? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number. Answer is complete but not entirely correct. a. Free cash flow $ 4,728 million b. Additional tax $ 109.62 million c. Free cash flow $ 4,728 million
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