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 in
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$27,576Costs17,578Depreciation1,411Earnings before interest and taxes (EBIT)$8,587Interest expense526Pretax income8,061Federal taxes (@ 21%)1,693Net income$6,368
BALANCE SHEET OF QUICK BURGER CORP., 2019(Figures in $ millions)Assets20192018Liabilities and Shareholders' Equity20192018Current assetsCurrent liabilitiesCash and marketable securities$2,345$2,345Debt due for repayment$394Receivables1,3841,344Accounts payable$3,4123,152Inventories131126Total current liabilities$3,412$3,546Other current assets1,098625Total current assets$4,958$4,440Fixed assetsLong-term debt$13,642$12,143Property, plant, and equipment$24,686$22,844Other long-term liabilities3,0662,966Intangible assets (goodwill)2,8132,662Total liabilities$20,120$18,655Other long-term assets2,9923,108Total shareholders' equity15,32914,399Total assets$35,449$33,054Total liabilities and shareholders' equity$35,449$33,054
In 2019 Quick Burger had capital expenditures of $3,058.
a.Calculate Quick Burger's 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 company's free cash flow have been if it was all-equity financed?(Enter your answer in millions.)
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