The 2018 Income Statement for Lou's Shoes Shows That Depreciation

question 30

Multiple Choice

The 2018 income statement for Lou's Shoes shows that depreciation expense is $2 million, EBIT is $5 million, EBT is $3 million, and the tax rate is 40 percent. At the beginning of the year, the balance of gross fixed assets was $16 million and net operating working capital was $6 million. At the end of the year gross fixed assets was $20 million. Lou's free cash flow for the year was $4 million. What is their end of year balance for net operating working capital?

• A) $1.8 million
• B) $3.8 million
• C) $5.8 million
• D) $12.2 million

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Low Blood Pressure

A condition where the pressure exerted by blood against the walls of blood vessels is consistently lower than normal, which can lead to symptoms like dizziness or fainting.

Alternative Medicine

Medical practices and products that are not part of standard medical care, often involving natural, holistic, or traditional methods.

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Conventional medical practices and treatments that are widely accepted and practiced by the general medical community.

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