You are working on your second project as an equity research

intern at a bulge investment bank. Your focus is in retail space,

especially in the health and fitness sector. Currently, you are

gathering information on a fast$-$growing chain fitness company

called LuluYoga. You are interested in calculating the free cash

flow of the firm.LuluYoga offers yoga classes in several major cities in the

United States. Two major revenue resources are selling workout gear

and membership passes for class access.Assume at the beginning of year $2016,$ LuluYoga has zero

inventory.In year $2016,$ LuluYoga purchased $10,000$ yoga mats at a price of

$$10$ each. The company sells $6,000$ mats at a price of $$15$ in year

$2016$ and sells the remaining at a price of $$20$ in year $2017.$In year $2016,$ LuluYoga sells $1,000$ membership passes for $$2,000$

each. $80\%$ of the classes purchased were used in $2016$ and the rest

are used in $2017.$The yoga master$$s compensation to teach classes

are $$300$K in year $2016$ and $$200$K in year $2017.$LuluYoga pays corporate tax of $35\%.$Q$1.$ What is LuluYoga$$s net operating profit in $2016?$Q$2.$ What is LuluYoga$$s net operating profit in $2017?$Q$3.$ What is the change of inventory from $2015$ to $2016,$ and from

$2016$ to $2017?$Q$4.$ What is the deferred revenue in $2016?$Q$5.$ What is the change of NOWC in year $2016?$Q$6.$ What is the FCF of LuluYoga in year $2016?$Q$7.$ What is the FCF of LuluYoga in year $2017$