2-11 What effect did the expansion have on capital used in operations? operating= NOWC Net fixed assets capital operating=$913,042+$939,790 capitally =$1,852,832 Operating =$1, 138, 600 capitano Copy right C 2002 by Harcourt, Inc. All rights reserved
2 - 11 Copyright © 2002 by Harcourt, Inc. All rights reserved. What effect did the expansion have on capital used in operations? = NOWC + Net fixed assets. = $913,042 + $939,790 = $1,852,832. = $1,138,600. Operating capital01 Operating capital00 Operating capital
2-12 Did the expansion create additional net operating profit after taxes(NOPAT)? NOPAT= EBIT(1-Tax rate) NOPAT01=$690,560(1-04) =690,560(06) =$414336 NOPAT00=$125,460 Copy right C 2002 by Harcourt, Inc. All rights reserved
2 - 12 Copyright © 2002 by Harcourt, Inc. All rights reserved. Did the expansion create additional net operating profit after taxes (NOPAT)? NOPAT = EBIT(1 - Tax rate) NOPAT01 = -$690,560(1 - 0.4) = -$690,560(0.6) = -$414,336. NOPAT00 = $125,460
2-13 What is your initial assessment of the expansion's effect on operations? 2001 2000 Sales $5,834400$3432,000 NOPAT ($414336)$125460 NOWC $913,042$793800 Operating capital $1, 852, 832 $1, 138, 600 Copy right C 2002 by Harcourt, Inc. All rights reserved
2 - 13 Copyright © 2002 by Harcourt, Inc. All rights reserved. What is your initial assessment of the expansion’s effect on operations? 2001 2000 Sales $5,834,400 $3,432,000 NOPAT ($414,336) $125,460 NOWC $913,042 $793,800 Operating capital $1,852,832 $1,138,600
2-14 What effect did the company's expansion have on its net cash flow and operating cash flow? NCF01=N|+DEP=519936+$116,960 =-$402976 NcF00=$87,960+$18,900=$106,860. OCF E NOPAT DEP =$414,336+$116,960 =$297376 ocF0=$125460+$18900 =$144,360. Copy right C 2002 by Harcourt, Inc. All rights reserved
2 - 14 Copyright © 2002 by Harcourt, Inc. All rights reserved. What effect did the company’s expansion have on its net cash flow and operating cash flow? NCF01 = NI + DEP= -$519,936 + $116,960 = -$402,976. NCF00 = $87,960 + $18,900 = $106,860. OCF01 = NOPAT + DEP = -$414,336 + $116,960 = -$297,376. OCF00= $125,460 + $18,900 = $144,360