Free Cash Flows

Rhodes Corporation's financial statements are shown below.

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

	2022			2021
Sales	$	11,000		$	10,000
Operating costs excluding depreciation		9,558			8,706
Depreciation and amortization		350			330
Earnings before interest and taxes	$	1,092		$	964
Less interest		260			200
Pre-tax income	$	832		$	764
Taxes (25%)		208			191
Net income available to common stockholders	$	624		$	573
Common dividends	$	202		$	200

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

	2022			2021
Assets
Cash	$	450		$	400
Short-term investments		110			100
Accounts receivable		2,750			2,500
Inventories		1,650			1,400
Total current assets	$	4,960		$	4,400
Net plant and equipment		3,850			3,500
Total assets	$	8,810		$	7,900
Liabilities and Equity
Accounts payable	$	900		$	800
Accruals		450			400
Notes payable		348			200
Total current liabilities	$	1,698		$	1,400
Long-term debt		900			800
Total liabilities	$	2,598			2,200
Common stock		4,690			4,600
Retained earnings		1,522			1,100
Total common equity	$	6,212		$	5,700
Total liabilities and equity	$	8,810		$	7,900

Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.

1. What is the net operating profit after taxes (NOPAT) for 2022? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.

   $ million

2. What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

   2022: $ million

   2021: $ million

3. What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

   2022: $ million

   2021: $ million

4. What is the free cash flow for 2022? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.

   $ million

5. What is the ROIC for 2022? Round your answer to two decimal places.

   %

6. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answers in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answers to the nearest whole number.

   After-tax interest payment	$ million
   Reduction (increase) in debt	$ million
   Payment of dividends	$ million
   Repurchase (Issue) stock	$ million
   Purchase (Sale) of short-term investments	$ million