Testbank for Business Finance Essay
1. Last year Rattner Robotics had $5 million in operating income (EBIT). The company had net depreciation expense of $1 million and an 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 non-cash item is depreciation.
a. What was the company’s net income for the year? $2.4 million
b. What was the company’s net cash flow? $3.4 million
c. What was the company’s net operating …show more content…
Accounts payable $ 108.0 $ 90.0 Notes payable 67.0 51.5 Accruals 72.0 60.0 Long-term bonds $ 150.0 $ 150.0 Common stock (50 million shares) 50.0 50.0 Retained earnings 225.0 208.5 Total liabilities and equity $ 672.0 $ 610.0
a. What is the net operating profit (NOPAT)