Answer: (1) $61,495
(2) $17,200
(3) $5,400
Explanation:
Given that,
sales = $275,000
costs = $188,000
other expenses = $7,900
depreciation expense = $15,200
interest expense = $13,600
taxes = $17,605
dividends = $10,500
new equity issued = $5,100
Net new long-term debt = $3,600
EBIT = sales - depreciation expense - costs - other expenses
= $275,000 - $15,200 - $188,000 - $7,900
= $63,900
EBT = EBIT - Interest
= $63,900 - $13,600
= $50,300
EAT = EBT - Taxes
= $50,300 - $17,605
= $32,695
Retained earnings = EAT - Dividends
= $32,695 - $10,500
= $22,195
(1) operating cash flow = EBIT - Taxes + depreciation expense
= $63,900 - $17,605 + $15,200
= $61,495
(2) cash flow to creditors = Interest - Net new long-term debt
= $13,600 - (-$3,600)
= $17,200
(3) cash flow to stock holders = Dividend - net new equity
= $10,500 - $5,100
= $5,400
