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$27,567Costs17,569Depreciation1,402Earnings before interest and taxes (EBIT)$8,596Interest expense517Pretax income8,079Federal plus other taxes2,614Net income$5,465
BALANCE SHEET OF QUICK BURGER CORP., 2019(Figures in $ millions)Assets20192018Liabilities and Shareholders' Equity20192018Current assetsCurrent liabilitiesCash and marketable securities$2,336$2,336Debt due for repayment?$367Receivables1,3751,335Accounts payable$3,4033,143Inventories122117Total current liabilities$3,403$3,510Other current assets1,089616Total current assets$4,922$4,404Fixed assetsLong-term debt$13,633$12,134Property, plant, and equipment$24,677$22,835Other long-term liabilities3,0572,957Intangible assets (goodwill)2,8042,653Total liabilities$20,093$18,601Other long-term assets2,9833,099Total shareholders' equity15,29314,390Total assets$35,386$32,991Total liabilities and shareholders' equity$35,386$32,991
In 2019 Quick Burger had capital expenditures of $3,049.
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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