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1. Use the following financial statements for Laforge Systems, Inc. to calculate the company's FCFF and FCFE for 2018. What are the adjustments to FCFF which result in FCFE? LaForge Systems, Inc. Balance Sheet (in $ millions) Years Ended 31 December Cash & equivalents Accounts receivable Inventory Total currents assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets 2007 210 474 520 1,204 2,501 (604) 1,897 3,101 2008 248 513 564 1,325 2,850 (784) 2,066 3,391 Accounts payable Notes payable Accrued taxes & expenses Total current liabilities Long-term debt Common stock Additional paid-in-capital Retained earnings Total shareholders' equity Total liabilities & SE 295 300 76 671 1,010 50 300 1,070 1,420 3,101 317 310 99 726 1,050 SO 300 1,265 1,615 3,391 Statement of Income In $ millions, except per-share data Total revenue Operating costs EBITDA Depreciation EBIT Interest expense Income before tax Taxes (40%) Net income Dividends Addtion to retained earnings 2008 2,215 1,430 785 180 605 130 475 190 285 90 195 Retained earnings Total shareholders' equity Total liabilities & SE 1,070 1,420 3,101 1,265 1,615 3,391 Statement of Income In $ millions, except per-share data Total revenue Operating costs EBITDA Depreciation EBIT Interest expense Income before tax Taxes (40%) Net income Dividends Addtion to retained earnings 2008 2,215 1,430 785 180 605 130 475 190 285 90 195 Statement of Cash Flows (in 9 millions) Net income Depreciation Accounts receivable Inve ories Accounts payable Accrued taxes & expenses Cash from operations 2008 285 180 (39) 44) 22 23 427 Purchases of fixed assets Cash from investing (349) (349) 10 40 (90) (40) Notes payable Long-term debt Dividends Cash from financing Change in cash Cash-beginning of year Cash-end of year 38 210 248 Supplemental: Cash interest paid Cash income taxes paid 130 190