You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s free cash

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1. You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s free cash
flow. From the income statement, you see that Fields and Struthers earned an EBIT of $74 million, had a
tax rate of 30 percent, and its depreciation expense was $9 million. Fields and Struthers’ gross fixed assets
increased by $40 million from 2014 and 2015. The firm’s current assets increased by $36 million and
spontaneous current liabilities increased by $20 million.
Calculate Fields and Struthers’ operating cash flow for 2015. (Enter your answer in millions of dollars rounded
to 1 decimal place.)
Operating cash flow

$m

Calculate Fields and Struthers’ investment in operating capital for 2015. (Enter your answer in millions of
dollars.)
Investment in operating capital

$m

Calculate Fields and Struthers’ free cash flow for 2015. (Enter your answer in millions of dollars rounded to 1
decimal place.)
Free cash flow

$m

2. Tater and Pepper Corp. reported free cash flows for 2015 of $54.1 million and investment in operating
capital of $37.1 million. Tater and Pepper incurred $15.1 million in depreciation expense and paid $20.1
million in taxes on EBIT in 2015.
Calculate Tater and Pepper’s 2015 EBIT. (Enter your answer in millions of dollars rounded to 1 decimal place.)
EBIT

$m

3. Mr. Husker’s Tuxedos Corp. began the year 2015 with $252 million in retained earnings. The firm earned
net income of $31 million in 2015 and paid dividends of $5 million to its preferred stockholders and $12
million to its common stockholders.
What is the year-end 2015 balance in retained earnings for Mr. Husker’s Tuxedos? (Enter your answer in millions
of dollars.)
Retained earnings

$m

4. Muffin’s Masonry, Inc.’s, balance sheet lists net fixed assets as $22.00 million. The fixed assets could
currently be sold for $35.00 million. Muffin’s current balance sheet shows current liabilities of $9.50
million and net working capital of $8.50 million. If all the current accounts were liquidated today, the
company would receive $7.65 million cash after paying the $9.50 million in current liabilities.

What is the book value of Muffin’s Masonry’s assets today and the market value of these assets? (Enter your
answers in millions of dollars rounded to 2 decimal places.)