P4–6 finding operating and free cash flows consider the following balance sheets and selected data from the income statement of keith corporation. keith corporation balance sheets december 31assets 2015 2014cash $ 1,500 $ 1,000marketable securities 1,800 1,200accounts receivable 2,000 1,800inventories 2,900 2,800total current assets $ 8,200 $ 6,800gross fixed assets $29,500 $28,100less: accumulated depreciation 14,700 13,100net fixed assets $14,800 $15,000total assets $23,000 $21,800liabilities and stockholders’ equityaccounts payable $ 1,600 $ 1,500notes payable 2,800 2,200accruals 200 300total current liabilities $ 4,600 $ 4,000long-term debt 5,000 5,000total liabilities $ 9,600 $ 9,000common stock $10,000 $10,000retained earnings 3,400 2,800total stockholders’ equity $13,400 $12,800total liabilities and stockholders’ equity $23,000 $21,800keith corporation income statement data (2015)depreciation expense $1,600earnings before interest and taxes (ebit) 2,700interest expense 367net profits after taxes 1,400tax rate 40%a. calculate the firm’s net operating profit after taxes (nopat) for the year endeddecember 31, 2015, using equation 4.1.b. calculate the firm’s operating cash flow (ocf) for the year ended december 31,2015, using equation 4.3.c. calculate the firm’s free cash flow (fcf) for the year ended december 31, 2015,using equation 4.4.d. interpret, compare, and contrast your cash flow estimates in parts b and c. a. nopat = ebit x (1-t) b. ocf = nopat + depreciation c. fcf = ocf - net fixed asset investment - net current asset investment net fixed asset investment = change in net fixed assets + depreciation net current asset investment = change in current assets - change in (accounts payable and accruals)