Question
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022. In 2022 Quick Burger had capital expenditures of
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2022. In 2022 Quick Burger had capital expenditures of $3,052.
a. Calculate Quick Burgers free cash flow in 2022. Note: Enter your answer in millions.
b. If Quick Burger was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 21%.) Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.
c. What would the companys free cash flow have been if it was all-equity financed? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.
\begin{tabular}{lr} \multicolumn{1}{l}{INCOMESTATEMENTOFQUICKBURGERCORPORATION,2022(Figuresin$millions)} \\ Net sales & $27,570 \\ Costs & 17,572 \\ Depreciation & 1,405 \\ Earnings before interest and taxes (EBIT) & $8,593 \\ Interest expense & 520 \\ Pretax income & 8,073 \\ Federal taxes ( 21% ) & 1,695 \\ Net income & $6,378 \\ \hline \end{tabular}Step by Step Solution
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