4. Exhibit 18.11 presents deferred-tax assets and liabilities for ToyCo. Using Exhibit 18.8 as a guide, reorganize the deferred-tax table into two categories:

net operating deferred-tax assets (net of operating deferred-tax liabilities), and net nonoperating deferred-tax assets (net of nonoperating deferred-tax liabilities). In year 3, ToyCo generated $200.7 million in operating taxes on

$673.6 million of EBITA. Using this information, what are the cash taxes in year 3? What is the percent of operating taxes that were deferred, and what is the operating cash tax rate?

EXHIBIT 18.11 ToyCo: Deferred-Tax Assets and Liabilities $ million Year 1 Year 2 Year 3 Deferred-tax assets Accounts receivable 20.5 16.8 17.3 Inventories 24.6 20.2 15.9 Losses and tax credit carryforwards 39.1 34.4 29.6 Pension 10.0 34.1 26.6 Deferred-tax assets 94.2 105.5 89.4 Deferred-tax liabilities Convertible debentures 40.2 47.6 56.8 Depreciation of long-lived assets 47.7 121.5 120.3 Equity method investment – – 26.9 Deferred-tax liabilities 87.9 169.1 204.0