You Are Considering an Investment in Fields and Struthers, Inc

question 54

Multiple Choice

You are considering an investment in Fields and Struthers, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $52 million, paid taxes of $10 million, and its depreciation expense was $5 million. Fields and Struthers' gross fixed assets increased by $38 million from 2017 to 2018. The firm's current assets increased by $20 million and spontaneous current liabilities increased by $12 million. Calculate Fields and Struthers' operating cash flow (OCF) , investment in operating capital (IOC) , and free cash flow (FCF) for 2018.

• A) OCF = $42,000,000; IOC = $37,000,000; FCF = $5,000,000
• B) OCF = $47,000,000; IOC = $37,000,000; FCF = $10,000,000
• C) OCF = $42,000,000; IOC = $46,000,000; FCF = −$4,000,000
• D) OCF = $47,000,000; IOC = $46,000,000; FCF = $1,000,000

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Definitions:

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Netnography

A specialized form of ethnography adapted to computer-mediated social worlds.

On-site

Referring to activities or services provided or occurring at a specific location, typically the place where the activity or event is meant to occur.

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A workspace designated for individuals conducting research, often equipped with resources and tools necessary for their projects.