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The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2016. INCOME STATEMENT OF QUICK BURGER CORP., 2016 (Figures
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2016. INCOME STATEMENT OF QUICK BURGER CORP., 2016 (Figures in $ millions) Net sales $ 27,587 Costs 17,589 Depreciation 1,422 Earnings before interest and taxes (EBIT) $ 8,576 Interest expense 537 Pretax income 8,039 Taxes 2,814 Net income $ 5,225 2016 2015 3,423 3,423 427 3,163 3,590 Assets Current assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Fixed assets Property, plant, and equipment Intangible assets (goodwill) Other long-term assets Total assets BALANCE SHEET OF QUICK BURGER CORP., 2016 (Figures in $ millions) 2016 2015 Liabilities and Shareholders' Equity Current liabilities 2,356 2,356 Debt due for repayment 1,395 1,355 Accounts payable 142 137 Total current liabilities 1,109 636 5,002 4,484 Long-term debt 24,697 22,855 Other long-term liabilities 2,824 2,673 Total liabilities 3,003 3,119 Total shareholders' equity 35,526 33,131 Total liabilities and shareholders equity 13,653 3,077 20, 153 15,373 35,526 12,154 2,977 18,721 14,410 33, 131 In 2016 Quick Burger had capital expenditures of $3,069. a. Calculate Quick Burger's free cash flow in 2016. (Enter your answer in millions.) Free cash flow million b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 35%.) (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Additional tax million c. What would the company's free cash flow have been if it was all-equity financed? Free cash flow
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