3. (13points) Assuming that the tax rate is 20%, answer the questions below.

	2018	2019
Sales	4,200	4,800
Cost of Goods Sold	2,000	2,500
Interest	400	500
Dividends	200	300
Depreciation	300	400
Cash	250	300
Account Receivables	300	400
Account Payables	900	1,000
Inventory	1,000	1,500
Long-term Debt	3,300	4,000
Net Fixed Assets	6,000	6,500

1. (5points) What is the firms cash flow from assets for 2019?

CFFA = OCF Net Capital Spending Change in NWC

OCF = EBIT + Depreciation Taxes

OCF = 1900 + 400 280 = 2020

Net Capital Spending = End NFA - Beg NFA + Depreciation

Net Capital Spending = 6500 6000 + 400 = 900

Change in NWC = End NWC Beg NWC

Change in NWC = 1200 650 = 550

CFFA = 2020 900 550 = $570

2. (3points) What is the value of cash flow to bondholders for 2019?

CFTB = Interest Paid Net New Borrowing

CFTB = 500 (4000 3300) = -$200

3. (5points) What is the value of cash flow to stockholders for 2019?

You are NOT allowed to use the cash flow identity for this problem.

CFTS = Dividends Paid Net New Equity Raised

CFTS = 300 0 = $300

*bold is the work I've already done