1.

Problem 1. GoPro - NOPAT

GoPro's earnings before interest and taxes (EBIT) was$190

million.

Assuming GoPro's tax rate is35%

, what is their net operating profit after taxes (NOPAT) for 2014 expressed in million of dollars?

*Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision.

2.

Problem 2. GoPro - Unlevered Free Cash Flow

In 2014, GoPro spent$27.5

million on capital expenditures, experienced an increase in net working capital (including cash) equal to$239

million, and realized$18

million in depreciation.

What is GoPro's unlevered free cash flow for 2014?

*Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision.

3.

Problem 3. Free Cash Flow

What does a negative value for unlevered free cash flow imply for the claimants of a firm?

Revenues are less than costs

Shareholders have made a bad investment

The firm must raise capital from the capital markets (e.g., debt, equity), or liquidate internal assets (e.g., cash)

The firm is over investing

Management is doing a bad job

4.

Problem 4. Free Cash Flow

When a firm changes its capital structure by issuing or retiring debt, for example, this change alters the firms unlevered free cash flow.

True

False