Reference no: EM132073541

1. Free Cash Flow You are considering an investment in Crew Cut, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Crew Cut earned an EBIT of $23.17 million, paid taxes of $3.83 million, and its depreciation expense was $7.83 million. Crew Cut's gross fixed assets increased by $10.17 million from 2007 to 2008. The firm's current assets increased by $6.17 million and spontaneous current liabilities increased by $3.83 million. What is Crew Cut's operating cash flow, investment in operating capital and free cash flow for 2008, respectively in millions?

A) $27.17, $10.17, $17.00

B) $23.17, $11.66, $11.51

C) $27.17, $12.51, $14.66

D) $23.17, $10.17, $13.00

2. A stock with a beta of 1.0 will:

a. always generate a return equal to the market average.

b. always generate a return that is close to the market average.

c. always generate a return that is at least as large as the market average..

d. All of the above are correct.

e. None of the above is correct.