On the basis of free cash flow and weighted average cost

Reference no: EM1312004

On the basis of Free Cash Flow and weighted Average cost of capital

Use the following income statements and balance sheets to calculate garnets Inc free cash flow for 2008.

Garnet Inc
	2008	2007
income statement
net sales	$530	500
cost s	40	380
depreciation	30	25
total operating costs	430	405
earning before interest and taxes	100	95
less interest	23	21
earning before taxes	77	74
taxes(40%)	30.8	29.6
net income	46.2	44.4
balance sheet
assets
cash	28	27
marketable securities	69	66
accounts receivable	81	80
inventories	112	106
total current assets	293	279
net plant and equipment	281	265
total assets	574	544
liabilities and equity
accounts payable	56	52
notes payable	138	130
accruals	28	28
total current liabilities	222	210
long term bonds	173	164
common stock	100	100
retained earning	79	70
common equity	179	170
total liabilities and equity	574	544

Reference no: EM1312004

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