Last year Frank's Furnaces had $5 million in operating income (EBIT). The company had a net depreciation expense of $1 million and interest expense of $1 million; its tax rate was 40%. The company has $14 million in operating current assets and $4 million in operating current liabilities; it has $15 million in net plant and equipment. The company estimated that is has an after-tax cost of capital of 10%. Assume Frank's only non-cash item was depreciation.
a) What was the company's net income for the year?
b) What was the company's net cash flow?
c) What was the company's net operating profit after tax (NOPAT)
d) Calculate net operating working capital and total net operating capital for the current year.
e) If total net operating capital in the previous year was $24 million, what was the company's free cash flow (FCF) for the year?