1. Calculate the following values for the company for the year ending in 20x9. Present evidence of all your calculations. a.NOPAT - Net Operating Profit after Taxes b.OCF - Operating Cash Flow c.FCF - Free Cash Flow 2. Discuss what meaning each of the measures calculated in the previous question has, both for management and for investors and creditors, among other constituents. 3. What is the main cause of the differences that exist between the company's earnings and the cash flows of the same evaluated period?

Malkom Ray Corporation Balance Sheet for December 31, 20x8 and 20x9 20x9 20x8 Cash and Marketable Securities $ 10,000 $ 9,000 Account Receivables 16,000 12,500 Inventories 45,500 29,000 Total Current Assets $ 71,500 $ 50,500 Land 26,000 20,000 Building and Equipment 100,000 70,000 Less accumulated depreciation (38,000) (28,000) Total Fixed Assets $ 88,000 $ 62,000 Total Assets $159.500 $112.500 Accounts Payable $ 17,000 $ 6,500 Accrued Expenses 5,000 4,000 Short-term notes 47,000 17,000 Total Current Liabilities $ 69,000 $ 27,500 Long-term Debt 27,450 28,750 Common Stock 31,500 31,500 Retained Earnings 31,550 24,750 Total Debt and Equity $159.500 $112.500 Malkom Ray Corporation Income Statement for December 31, 20x9 20x9 Sales $160,000 Cost of Goods Sold 96,000 Gross Profit $ 64,000 Operating Expenses Fixed cash operating expenses $ 21,000 Variable operating expenses 16,000 Depreciation 10,000 Total Operating Expenses $ 47,000 Earnings Before Interest and Taxes $ 17,000 Interest Expense 6,100 Earnings Before Taxes $ 10,900 Income Taxes 3,900 Net Income (Loss) $ 7.000