Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 $ 27,569
Costs 17,571
Depreciation 1,404
Earnings before interest and taxes (EBIT) $ 8,594
Interest expense 519
Pretax income 8,075
Taxes 2,826
Net income $ 5,249

BALANCE SHEET OF QUICK BURGER CORP., 2016
(Figures in $ millions)
Assets 2016 2015 Liabilities and Shareholders' Equity 2016 2015
Current assets Current liabilities
Cash and marketable securities 2,338 2,338 Debt due for repayment 373
Receivables 1,377 1,337 Accounts payable 3,405 3,145
Inventories 124 119 Total current liabilities 3,405 3,518
Other current assets 1,091 618
Total current assets 4,930 4,412
Fixed assets Long-term debt 13,635 12,136
Property, plant, and equipment 24,679 22,837 Other long-term liabilities 3,059 2,959
Intangible assets (goodwill) 2,806 2,655 Total liabilities 20,099 18,613
Other long-term assets 2,985 3,101 Total shareholders equity 15,301 14,392
Total assets 35,400 33,005 Total liabilities and shareholders equity 35,400 33,005

In 2016 Quick Burger had capital expenditures of $3,051.

a. Calculate Quick Burgers free cash flow in 2016. (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 35%.) (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Public Health And Not For Profit Organizations

Authors: Steven A. Finkler

4th International Edition

0132912813, 9780132912815

More Books

Students also viewed these Finance questions

Question

=+Construct a data- and research-driven SWOT analysis

Answered: 1 week ago

Question

=+Who are our customers?

Answered: 1 week ago

Question

=+What are our goals presently?

Answered: 1 week ago