Reference no: EM13978957

The following table shows an abbreviated income statement and balance sheet for McDonald's Corporation for 2012. INCOME STATEMENT OF MCDONALD’S CORP., 2012 (Figures in $ millions) Net sales 27,587 Costs 17,589 Depreciation 1,422 Earnings before interest and taxes (EBIT) 8,576 Interest expense 537 Pretax income 8,039 Taxes 2,654 Net income 5,385 BALANCE SHEET OF MCDONALD’S CORP., 2012 (Figures in $ millions) Assets 2012 2011 Liabilities and Shareholders' equity 2012 2011 Current assets Current liabilities Cash and marketable securities 2,356 2,356 Debt due for repayment — 427 Receivables 1,395 1,355 Accounts payable 3,423 3,163 Inventories 142 137 Total current liabilities 3,423 3,590 Other current assets 1,109 636 Total current assets 5,002 4,484 Fixed assets Long-term debt 13,653 12,154 Property, plant, and equipment 24,697 22,855 Other long-term liabilities 3,077 2,977 Intangible assets (goodwill) 2,824 2,673 Total liabilities 20,153 18,721 Other long-term assets 3,003 3,119 Total shareholders’ equity 15,373 14,410 Total assets 35,526 33,131 Total liabilities and shareholders’ equity 35,526 33,131 In 2012 McDonald’s had capital expenditures of $3,069. a. Calculate McDonald’s free cash flow in 2012. (Enter your answer in millions.) Free cash flow $ million b. If McDonald’s was financed entirely by equity, how much more tax would the company have paid? (Assume a tax rate of 35% on the revised pretax income.) (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole number.) Additional tax $ million