Free Cash Flows

Rhodes Corporations financial statements are shown below.

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

	2020			2019
Sales	$	13,000		$	11,000
Operating costs excluding depreciation		11,628			9,694
Depreciation and amortization		360			350
Earnings before interest and taxes	$	1,012		$	956
Less interest		240			200
Pre-tax income	$	772		$	756
Taxes (25%)		193			189
Net income available to common stockholders	$	579		$	567
Common dividends	$	205		$	200

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

	2020			2019
Assets
Cash	$	650		$	600
Short-term investments		120			100
Accounts receivable		2,750			2,500
Inventories		1,850			1,700
Total current assets	$	5,370		$	4,900
Net plant and equipment		3,850			3,500
Total assets	$	9,220		$	8,400
Liabilities and Equity
Accounts payable	$	1,300		$	1,200
Accruals		650			600
Notes payable		392			200
Total current liabilities	$	2,342		$	2,000
Long-term debt		1,300			1,200
Total liabilities	$	3,642			3,200
Common stock		4,004			4,000
Retained earnings		1,574			1,200
Total common equity	$	5,578		$	5,200
Total liabilities and equity	$	9,220		$	8,400

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 2020? 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.

   2020: $ million

   2019: $ 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.

   2020: $ million

   2019: $ million

4. What is the free cash flow for 2020? 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