Question
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2019. INCOME STATEMENT OF QUICK BURGER CORP., 2019 (Figures
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2019. INCOME STATEMENT OF QUICK BURGER CORP., 2019 (Figures in $ millions) Net sales $ 27,580 Costs 17,582 Depreciation 1,415 Earnings before interest and taxes (EBIT) $ 8,583 Interest expense 530 Pretax income 8,053 Federal plus other taxes 2,819 Net income $ 5,234 BALANCE SHEET OF QUICK BURGER CORP., 2019 (Figures in $ millions) Assets 2019 2018 Liabilities and Shareholders' Equity 2019 2018 Current assets Current liabilities Cash and marketable securities $ 2,349 $ 2,349 Debt due for repayment $ 406 Receivables 1,388 1,348 Accounts payable $ 3,416 3,156 Inventories 135 130 Total current liabilities $ 3,416 $ 3,562 Other current assets 1,102 629 Total current assets $ 4,974 $ 4,456 Fixed assets Long-term debt $ 13,646 $ 12,147 Property, plant, and equipment $ 24,690 $ 22,848 Other long-term liabilities 3,070 2,970 Intangible assets (goodwill) 2,817 2,666 Total liabilities $ 20,132 $ 18,679 Other long-term assets 2,996 3,112 Total shareholders equity 15,345 14,403 Total assets $ 35,477 $ 33,082 Total liabilities and shareholders equity $ 35,477 $ 33,082 In 2019 Quick Burger had capital expenditures of $3,062.
a. Calculate Quick Burgers free cash flow in 2019. (Enter your answer in millions.) b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.) (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) c.What would the companys free cash flow have been if it was all-equity financed? (Enter your answer in millions.)
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