1)Consider a firm with an EBIT of $868,000. The firm finances its assets with $2,680,000 debt (costing 8.2 percent and is all tax deductible) and 580,000 shares of stock selling at $6.00 per share. To reduce the firms risk associated with this financial leverage, the firm is considering reducing its debt by $1,000,000 by selling an additional 380,000 shares of stock. The firms tax rate is 21 percent. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $868,000.Calculate the change in the firms EPS from this change in capital structure.

a)EPS before=?

b)EPS after= ?

c)Difference=?

2) You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firms free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $98 million, had a tax rate of 21 percent, and its depreciation expense was $9 million. Fields and Struthers's NOPAT gross fixed assets increased by $64 million from 2020 and 2021. The firms current assets increased by $52 million and spontaneous current liabilities increased by $44 million.

a) Calculate Fields and Strutherss NOPAT operating cash flow for 2021.

b)Calculate Fields and Strutherss NOPAT investment in operating capital for 2021

3) Chriss Outdoor Furniture, Inc., has net cash flows from operating activities for the last year of $340 million. The income statement shows that net income is $315 million and depreciation expense is $44 million. During the year, the change in inventory on the balance sheet was $34 million, change in accrued wages and taxes was $14 million, and change in accounts payable was $25 million. At the beginning of the year, the balance of accounts receivable was $44 million.Calculate the end-of-year balance for accounts receivable.