Assets Current assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Fixed assets Property, plant, and equipment Intangible assets (goodwill) Other long-term assets Total assets Additional tax BALANCE SHEET OF MCDONALD'S CORP., 2012 (Figures in $ millions) Liabilities and Shareholders' SA 2012 2,343 1,382 129 1,096 4,950 24,684 2,811 2,990 2011 2,343 1,342 124 623 4,432 Long-term debt 22,842 Other long-term liabilities 2,660 3,106 35,435 33,040 equity Current liabilities Debt due for repayment Accounts payable Total current liabilities million Total liabilities Total shareholders' equity Total liabilities and shareholders' equity 2012 3,410 3,410 13,640 3,064 In 2012 McDonald's had capital expenditures of $3,056. a. Calculate McDonald's free cash flow in 2012. (Enter your answer in millions.) Free cash flow million If McDonald's was financed entirely by equity, how much more tax would the company b. have paid? (Assume a tax rate of 35% on the revised pretax income.) (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.) 20,114 15,321 35,435 2011 388 3,150 3,538 12,141 2,964 18,643 14,397 33,040
Assets Current assets Cash and marketable securities Receivables Inventories Other current assets Total current assets Fixed assets Property, plant, and equipment Intangible assets (goodwill) Other long-term assets Total assets Additional tax BALANCE SHEET OF MCDONALD'S CORP., 2012 (Figures in $ millions) Liabilities and Shareholders' SA 2012 2,343 1,382 129 1,096 4,950 24,684 2,811 2,990 2011 2,343 1,342 124 623 4,432 Long-term debt 22,842 Other long-term liabilities 2,660 3,106 35,435 33,040 equity Current liabilities Debt due for repayment Accounts payable Total current liabilities million Total liabilities Total shareholders' equity Total liabilities and shareholders' equity 2012 3,410 3,410 13,640 3,064 In 2012 McDonald's had capital expenditures of $3,056. a. Calculate McDonald's free cash flow in 2012. (Enter your answer in millions.) Free cash flow million If McDonald's was financed entirely by equity, how much more tax would the company b. have paid? (Assume a tax rate of 35% on the revised pretax income.) (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.) 20,114 15,321 35,435 2011 388 3,150 3,538 12,141 2,964 18,643 14,397 33,040
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept Introduction:
Free cash flows are those cash flows in the business which can be used freely in business. This means operating cash flows after making net capital expenditures and also after contribution to net working capital. Interest is only being paid on debt funds, no interest expense will be incurred on equity funds.
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