1. If the Scroggin Corporation has the following current asset and liability accounts at the end of 2014 and 2015, and they had net income of $852,000 and depreciation of $428,000 in 2015, what was their cash from operating activities, from the statement of cash flows, for 2015? Also calculate their Net Operating Working Capital at the end of 2015. (5 pts.)

2009 2010

Cash: $147,000 $152,000

Mark. Securities: $97,000 $85,000

Accts. Receivable: $336,000 $368,000

Inventory: $257,000 $295,000

Accts. Payable: $275,000 $304,000

Accruals: $102,000 $97,000

Notes Payable: $225,000 $262,000

2. The following balance sheet is for the Ballyhoo Company for fiscal year-end 2014. Please fill in all missing data. (4 pts.)

Assets Liabilities and Equity_____________

Cash $4,300 Accounts payable $2,340

Accounts receivable _____ Notes payable 4,300

Inventories 8,200 Accruals 1,620

Total current assets $14,300 Total current liabs. _____

Gross plant and equip. _____ Long-term bonds _____

Less: accum depr. 5,630 Total debt $13,100

Net plant and equip. _____

Common stock(100 shares) 6,300

Retained earnings _____

Total Common equity $13,800

Total Assets _______ Preferred Stock _____

Total liabs & equity $30,000

3. If the Potemkin Corporation has an EBITDA of $1.5 million, depreciation of $240,000, interest paid of $350,000, and dividends received of $200,000, what is their tax liability using the tax table on page 77 of the text? (3 pts.)

4. If the McLeary Corp. reports $27.3 million in sales for 2008 and incurs $19.4 million in operating costs, $1,650,000 in depreciation, and $1,720,000 in interest, calculate their net income, net cash flow, and their NOPAT. Use a flat tax rate of 35%. (5 pts.)

5. Provide an interpretation of what Free Cash Flow measures and what it can be used for. (3 pts.)