SOLUTION: Last year Rattner Robotics had $5 million in operating income (EBIT). The company had net
depreciation expense of $1 million and interest expense of $1 million; its corporate tax
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-> SOLUTION: Last year Rattner Robotics had $5 million in operating income (EBIT). The company had net
depreciation expense of $1 million and interest expense of $1 million; its corporate tax
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Question 90299: Last year Rattner Robotics had $5 million in operating income (EBIT). The company had net
depreciation expense of $1 million and interest expense of $1 million; its corporate tax rate
was 40 percent. The company has $14 million in current assets and $4 million in non-interest-
bearing current liabilities; it has $15 million in net plant and equipment. It estimates that
it has an after-tax cost of capital of 10 percent. Assume that Rattner's only noncash item was
depreciation.
a. What was the company's net income for the year?
b. What was the company's net cash flow?
c. What was the company's net operating profit after taxes (NOPAT)?
d. What was the company's operating cash flow?
e. If operating capital in the previous year was $24 million what was the company's free cash
flow (FCF) for the year?
f. What was the company's Economic Value Added (EVA)?
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