REVIEW QUESTIONS 167 REVIEW QUESTIONS 1. Exhibit 8.18 displays the income statement and reorganized balance sheet for BrandCo, a consumer products company. Using the method in Exhibit 8.5, determine net operating profit less adjusted taxes (NOPLAT) ology outlined for years 1 to 6. Assume an operating tax rate of 30 percent. Using the methodology outlined in Exhibit 8.6, determine free cash flow for years 1 to 6. EXHIBIT 8.18 BrandCo: Income Statement and Reorganized Balance Sheet million Income statement Today Year 1 Year2 Year3 Year4 Year5 Year6 Operating costs Depreciation Operating profits 3,77.1 40415 4,3042 4,56839 45 5,1262 53825 13,245,1) (3,4352) 13,6585) 13.896.3 (4,130.11 (4357.31 14.575.1 (8291 1970) (1033) (1100) (116.6) (1230) 11292) 449.1 509.2 542.3 577.6 612.2 6459 678 2 Interest 14.0) (14.0 (14.0)14.0) 14.0 (140) (14.0 435.1 495.2 528.3 563.5 598.2 631.9 664.2 Earnings before taxes Taxes Net income (1305) (1486) (1585) (1691) (179.5) (1896)199 2 464.9 Reorganized balance sheet Operating working capital Property and equipment Invested capital 18.9 2021 2152 2292 2429 2563 2691 15108 16166 1.7217 1.8336 19436 20505 21530 6997 18187 1.9369 20628 2.1865 23068 2422.1 Debt Shareholders' equity Invested capital 280.5 280.5 280.5 2805 280.5 280.5 280.5 14192 15382 16564 17823 1,9060 2.026.3 21416 Accounts payable has been netted against inventory to determine operating working capital