Financial Management 317 Financial Statements Homework 1. Bombay Energy recently reported (in million USD) $12,500 of Sales, $9,500 of Operating Costs other than Depreciation, and $925 of Depreciation. The company had $3,900 of outstanding bonds that carry a 6% Interest Rate, and its Federal-plus- State Income Tax Rate was 37%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $1,500 of Capital Expenditures on new fixed assets and to invest $450 in Net Operating Working Capital Calculate Bombay's Net Income and Free Cash Flow. NOTE: Interest Expense - Outstanding Bonds x Interest Rate 2. Tangent Corporation, recently reported the following information: Net Income - $ 756,000 Tax Rate -37% Interest Expense - $ 300,000 Total Investor Supplied Capital - $ 10.5 million Weighted Average Cost of Capital -10% What is the company's EVA? NOTE: You will need to calculate the company's EBIT by working up from the bottom of the income statement starting with net income. You can find taxable income dividing net income by (1 - tax rate)