Problem 3-24 Free Cash Flow (L03) The following table shows an abbreviated income statement and balance sheet for McDonald's Corporation for 2012 INCOME STATEMENT OF MCDONALD'S CORP., 2012 (Figures in $ millions) Net sales 27,574 Costs 17,576 Depreciation 1,409 Earnings before interest and taxes (EBIT) Interest expense 8,589 524 Pretax income Taxes 8,065 628 Net income 5,437 BALANCE SHEET OF MCDONALD'S CORP., 2012 (Figures in $ millions) 2012 2011 Liabilities and Shareholders' equity Current liabilities 2,343 2,343 Debt due for repayment 1,382 1,342 Accounts payable 2012 Assets Current assets Cash and marketable securities Receivables 2011 3,410 388 3.150 Inventories Other current assets 129 1,096 124 623 Total current liabilities 3.410 3,538 4,950 4,432 Total current assets Fixed assets Property, plant, and equipment Intangible assets (goodwill) Other long-term assets 24,684 22,842 Long-term debt Other long-term liabilities 13,640 3,064 12. 141 2.964 2,811 2,990 2,660 3,106 Total liabilities Total shareholders' equity 20.114 15,321 18,643 14 397 Total assets 35,435 33.040 Total liabilities and shareholders' equity 35 435 33.040 Property, plant, and equipment 24,684 22,842 Other long-term liabilities 13,640 3,064 12,141 2.964 Intangible assets (goodwill) Other long-term assets 2,811 2,990 2,660 3,106 Total liabilities Total shareholders' equity 20.114 15 321 18 643 14,397 Total assets 35 435 33,040 Total liabilities and shareholders' equity 35,435 33 040 In 2012 McDonald's had capital expenditures of $3,056 a. Calculate McDonald's free cash flow in 2012. (Enter your answer in millions.) Free cash flow million b. If McDonald's was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 35% on the revised protax income. (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number) Additional tax million References eBook & Resources Worksheet Difficulty: Intermediate Problem 3-24 Free Cash Flow (L03) Learning Objective: 03-03 Explain why income differs from cash flow Check my work Type here to search