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:

Self-Conscious Emotion

Emotions that involve reflection on the self, such as embarrassment, pride, shame, and guilt.

Embarrassment

A self-conscious emotion resulting from recognizing a socially awkward or anxiously perceived situation, often leading to blushing or a desire to hide.

Pride

A feeling of deep satisfaction derived from one's own achievements, or the achievements of those with whom one is closely associated.

Self-Description

A cognitive process in which individuals articulate their personal identity, characteristics, and perspectives.