You Are Considering an Investment in Fields and Struthers, Inc

question 108

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 2012 to 2013. 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 2013.

• 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:

Pay Level

A classification denoting the amount of compensation or salary assigned to a job, based on factors like complexity, responsibility, and market rates.

Pay Levels

The ranges of compensation provided to employees, often determined by experience, education, and role responsibilities within an organization.

Point Matrix

A quantitative tool used in job evaluation to assess the relative value of different positions within an organization based on predefined criteria.

Point Manual

A reference guide that assigns numerical values to job elements for the purpose of determining wage rates.