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Apple Inc.: Review Apple Inc.'s (Apple) financial statements in Exhibit P3. Apple has excess assets it does not need for its operations otaling $70.745 billion. These excess assets include excess cash ($15.127 billion in 2011; $14 billion in 2010) and all long-term marketable securities (reported at market value). For simplicity, assume that there is no tax that would be levied on Apple's excess assets if Apple were to distribute them to its shareholders. Apple's current market value of equity is $360.461 billion, has an effective ax rate of 24.22%. Q 3a. Prepare an economic (market value) balance sheet for Apple. 2 3b. Calculate Apple's free cash flow for the year ending 9/30/2011. Assume that Apple did not dispose of any property, plant, and equipment during the year. Exhibit P3, Apple Inc., Financial statements for years ending Sept 30 Income statements $ in millions) 30-Sep-2010 30-Sep-2011 Revenue $65,225 108,249 Cost of goods sold -39,541 -64.431 Gross margin 25,684 43,818 Research and development -1,782 -2,429 Selling, general and administrative -5,517 -7,599 Operating Income 18,385 33,790 Other income 155 415 Interest expense 0 0 ncome before taxes 18,540 34,205 ncome tax expense -4,527 -8,283 Net income $14,013 $25,922Balance sheets Balance Sheet - Assets: Cash and marketable securities 25,620 25,952 Accounts Receivable 5,510 5,369 Inventory 1,051 776 Other current assets 9.497 12,891 Total current assets 41,678 44,988 Property, plant and equipment (gross) 7,234 11,768 Accumulated depreciation -2,466 -3,991 Net Property, Plant and Equipment 4,768 7,777 Long-term marketable securities 25,391 55,618 Intangible assets 3,346 7,988 Total Assets 75,183 116,371 Balance Sheet - Liabilities & Equity: Accounts Payable 12,015 14,632 Accrued expenses 8,707 13,338 Other Current Operating Liabilities 6,670 11,786 Total Current Liabilities 27,392 39,756 Total Liabilities 27,392 39,756 Common Stock 10,622 13,744 Retained Earnings 37,169 62,841 Total Shareholders Equity 47,791 76,615 Total Liabilities and Equities 75,183 116,371