Question 2 (15 points)

Use the financial statements of a company to answer the 4 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign in front of first digit for negative numbers. Round to the nearest dollar. For example, if you obtain $200,436.75 then enter in the box: 200,437

Income Statement year ending 2016
Sales Revenues	$90,000
Cost of goods sold	54,500
Fixed costs	12,000
Selling, general, and administrative expenses	18,750
Depreciation	1,000
EBIT	3,750
Interest expense	0
Taxable Income	3,750
Taxes	750
Net Income	3,000
*** Tax rate	20%
Dividens paid	600
Partial Balance Sheet 12/31/2015
ASSETS		LIABILITIES
Current Assets		Current Liabilities
Cash	1,000	Notes payable	1,000
Accounts receivable	5,000	Accounts payable	6,800
Inventories	5,000	Total current liabilities	7,800
Total current assets	11,000	Long-term debt	22,000
		Total Liabilities	29,800
Gross Fixed assets	90,000	OWNERS EQUITY
Accumulated depreciation	10,000	Retained earnings	11,200
Net Fixed assets	80,000	Common stock	50,000
Intangible assets	0	Total owner's equity	61,200
TOTAL ASSETS	$91,000	TOTAL LIABILITIES & OWNERS EQUITY	$91,000
Partial Balance Sheet 12/31/2016
ASSETS		LIABILITIES
Current Assets		Current Liabilities
Cash	3,000	Notes payable	2,000
Accounts receivable	3,000	Accounts payable	8,000
Inventories	8,000	Total current liabilities	10,000
Total current assets	14,000	Long-term debt	9,400
Gross Fixed assets	80,000	Total liabilities	19,400
Accumulated depreciation	11,000	OWNERS EQUITY
Net Fixed Assets	69,000	Retained earnings	13,600
Intangible assets	0	Common stock	50,000
Total long-term assets	69,000	Total owner's equity	63,600
TOTAL ASSETS	$83,000	TOTAL LIABILITIES & OWNERS EQUITY	$83,000

DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign in front of first digit for negative numbers. Round to the nearest dollar. For example, if you obtain $200,436.75 then enter in the box: 200,437

1. What is the Net Cash Flow (NCF) for 2016?

2. What is the Gross investments in fixed assets for 2016?

3. What is the investment in Net Operating Working Capital (Investment NOWC) for 2016?

4. What is the Free Cash Flow (FCF) for 2016?