Using Rhodes Corporations financial statements (shown below), answer the following questions.

1. What is the net operating profit taxes (NOPAT) for 2010?
2. What are the amounts of net operating working capital for both years?
3. What are the amounts of total net operating capital for both years?
4. What is the free cash flow for 2010?
5. What is the ROC for 2010?
6. How much of the FCF did Rhodes use for each of the following purposes: after tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that use can be negative.)

Rhodes Corporation: Income Statements for Year Ending December 31

(Millions of Dollars)

2010 2009

Sale $11,000 $10,000

Operating costs excluding depreciation 9,360 8,500

Depreciation 380 360

_______ ______

Earnings before interest and taxes $1,260 $1,140

Less interest 120 100

_______ ______

Earnings before taxes $1,140 $1,040

Taxes (40%) 456 416

_______ ______

Net income available to common stockholders $ 684 $ 624

Common dividends $ 220 $ 200

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

	2010	2009
Assets
Cash	$550	$500
Short-term investments	110	100
Accounts receivable	2,750	2,500
Inventories	1,650	1,500
Total current assets	$5,060	$4,600
Net plant and equipment	3,850	3,500
Total assets	$8,910	$8,100
Liabilities and Equity
Accounts payable	$1,100	$1,000
Accruals	550	500
Note payable	384	200
Total current liabilities	$2,034	$1,700
Long-term debt	1,100	1,000
Total liabilities	$3,134	$2,700
Common stock	4,312	4,400
Retained earnings	1,464	1,000
Total common equity	$5,776	$5,400
Total liabilities and equity	$8,910	$8,100