1. Calculate FCF = NOPAT Change in NOA where (i) Cash is included in NOA and (ii) Cash is excluded from NOA. 8 marks. It is always helpful to construct the table below:

2019 2020

OA

OL

NOA

2. Calculate DD = net cash payments to shareholders, and CC = net cash payments to debtholders. 6 marks
3. Calculate the change in NWC, where NWC (net working capital) = CA CL. 4 marks
4. Suppose short term N/P is operating, and that the proceeds from the ST-N/P were used to purchase inventory. Calculate the cash paid for purchases. 4 marks

The financial records of Cooper Works showed the following information related to B/S accounts and 1/s. Balance Sheet at End of Year 2019 2020 Debits Cash $ 2,000 $ 2,200 A/R 3,800 4,800 Inventory 10,400 10,000 Prepaid expenses 600 800- LT - investments Buildings Machinery Patents 2,000 18,000 8,000 1,000 $45,800 0 24,000+ 12,400 800 $55,000 Credits A/P ST - N/P (operating) Accrued wages $ 2,400 1,800 600 $ 1,600 2,600 400 Acc. Depreciation LT - N/P C/S R/E 8,000 6,000 24,000 3,000 $45,800 7,800 7,000 30,000 5,600 $55,000 Income Statement for the Year Revenues and gains CGS Salaries expense Interest expense Other expenses and losses NI $24,400- (8,400) (6,000) (1,600) (3,200) $5,200 Additional data for 2020:- I. Acquired machinery costing $3,000; paid 1/3 in cash and issued a 5-year, interest-bearing note for the balance. II. Acquired machinery costing $5,000 by issuing C/S. III. Made addition to building costing $6,000, paid cash. IV. Paid a $1,000 LT-note by issuing C/S. V. Sold investment for $2,400 cash. VI. Paid cash dividends. VII. Depreciation recorded on buildings and machinery, $1,600. VIII. Disposed for $1,400 old machinery that originally cost $3,600 and that was y depreciated. IX. Proceeds from the ST-N/P were used to purchase inventory. The financial records of Cooper Works showed the following information related to B/S accounts and 1/s. Balance Sheet at End of Year 2019 2020 Debits Cash $ 2,000 $ 2,200 A/R 3,800 4,800 Inventory 10,400 10,000 Prepaid expenses 600 800- LT - investments Buildings Machinery Patents 2,000 18,000 8,000 1,000 $45,800 0 24,000+ 12,400 800 $55,000 Credits A/P ST - N/P (operating) Accrued wages $ 2,400 1,800 600 $ 1,600 2,600 400 Acc. Depreciation LT - N/P C/S R/E 8,000 6,000 24,000 3,000 $45,800 7,800 7,000 30,000 5,600 $55,000 Income Statement for the Year Revenues and gains CGS Salaries expense Interest expense Other expenses and losses NI $24,400- (8,400) (6,000) (1,600) (3,200) $5,200 Additional data for 2020:- I. Acquired machinery costing $3,000; paid 1/3 in cash and issued a 5-year, interest-bearing note for the balance. II. Acquired machinery costing $5,000 by issuing C/S. III. Made addition to building costing $6,000, paid cash. IV. Paid a $1,000 LT-note by issuing C/S. V. Sold investment for $2,400 cash. VI. Paid cash dividends. VII. Depreciation recorded on buildings and machinery, $1,600. VIII. Disposed for $1,400 old machinery that originally cost $3,600 and that was y depreciated. IX. Proceeds from the ST-N/P were used to purchase inventory