Below are financial statements for a firm that paid a net $16 million to shareholders in 2010.

a. Calculate free cash flow for 2010.

b. Calculate the cash flow with respect to net financial obligations.

c. Calculate return on common equity (ROCE) and return of net operating assets (RNOA) for 2010 on beginning-of-year denominators.

d. Show that ROCE and RNOA reconcile according to the financing leverage equation.

Balance Sheet, End of 2010 Operating assets Financial assets Total Operating liabilities Financial obligations Shareholders' equity Total 2010 600 300 900 200 500 200 900 2009 400 430 830 150 500 180 830 Income Statement,2010 Operating income, after tax Net financial expense,after tax Comprehensive income 40 4 36 Balance Sheet, End of 2010 Operating assets Financial assets Total Operating liabilities Financial obligations Shareholders' equity Total 2010 600 300 900 200 500 200 900 2009 400 430 830 150 500 180 830 Income Statement,2010 Operating income, after tax Net financial expense,after tax Comprehensive income 40 4 36