INCOME STATEMENT OF QUICK BURGER CORP., 2016

(Figures in $ millions)

Net sales $ 27,568

Costs 17,570

Depreciation 1,403

Earnings before interest and taxes (EBIT) $ 8,595

Interest expense 518

Pretax income 8,077

Taxes 2,827

Net income $ 5,250

________________________________________

BALANCE SHEET OF QUICK BURGER CORP., 2016

(Figures in $ millions)

Assets 2016 2015 Liabilities and Shareholders' Equity 2016 2015

Current assets Current liabilities

Cash and marketable securities 2,337 2,337 Debt due for repayment 370

Receivables 1,376 1,336 Accounts payable 3,404 3,144

Inventories 123 118 Total current liabilities 3,404 3,514

Other current assets 1,090 617

Total current assets 4,926 4,408

Fixed assets Long-term debt 13,634 12,135

Property, plant, and equipment 24,678 22,836 Other long-term liabilities 3,058 2,958

Intangible assets (goodwill) 2,805 2,654 Total liabilities 20,096 18,607

Other long-term assets 2,984 3,100 Total shareholders' equity 15,297 14,391

Total assets 35,393 32,998 Total liabilities and shareholders' equity 35,393 32,998

b.If Quick Burger was financed entirely by equity, how much more tax would the company have paid?(Assume a tax rate of 35%.)(Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

c.What would the company's free cash flow have been if it was all-equity financed?