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Begin with the partial model in the file Ch02 P15 Build a Model.xls on the textbook?s Web site

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Question;Begin with the partial model in the file Ch02 P15 Build a Model.xls on the textbook?s Web site.a. Using the financial statements shown below for Lan & Chen Technologies, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for 2010. (Hint: Start with the partial model in the file and report all dollar figures in thousands to reduceclutter.)b. Assume there were 15 million shares outstanding at the end of 2010, the year-end closing stock price was $65 per share, and the after-tax cost of capital was 8%.Calculate EVA and MVA for 2010.Lan & Chen Technologies: Income Statements for Year Ending December 31(Thousands of Dollars)2010 2009Sales $945,000 $900,000Expenses excluding depreciation and amortization 812,700 774,000EBITDA $132,300 $126,000Depreciation and amortization 33,100 31,500EBIT $ 99,200 $ 94,500Interest expense 10,470 8,600EBT $ 88,730 $ 85,900Taxes (40%) 35,492 34,360Net income $ 53,238 $ 51,540Common dividends $ 43,300 $ 41,230Addition to retained earnings $ 9,938 $ 10,3102010 2009AssetsCash and cash equivalents $ 47,250 $ 45,000Short-term investments 3,800 3,600Accounts receivable 283,500 270,000Inventories 141,750 135,000Total current assets $476,300 $453,600Net fixed assets 330,750 315,000Total assets $807,050 $768,600Liabilities and equityAccounts payable $ 94,500 $ 90,000Accruals 47,250 45,000Notes payable 26,262 9,000Total current liabilities $168,012 $144,000Long-term debt 94,500 90,000Total liabilities $262,512 $234,000Common stock 444,600 444,600Retained earnings 99,938 90,000Total common equity $544,538 $534,600Total liabilities and equity $807,050 $768,600

 

Paper#51746 | Written in 18-Jul-2015

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