A company sells a product with a unite price of $10. Each unit costs $4.48. The...

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A company sells a product with a unite price of $10. Each unit costs $4.48. The total number of sold units for the current year is 1,000 units. The company is financed with $6,000 as equity and $4,000 as debt, and the corporate tax rate is 20%. After careful investigation, you conclude that: ROIC: NOPLAT Invested capital Where NOPLAT stands for the Net Operating profit Less Adjusted Taxes. Besides, the company practice a linear depreciation on its non-current assets (NCA) that constitutes up to 60% of the total assets. The lifetime of NCA is 5 years. Moreover, the company pays 8% as interest on its debt. The board of the directors of the company decides to distribute 72% of the net income as dividend to shareholders, which corresponds to their requirement. 1. Find the ROIC of the company, assumed to keep unchanged during the life of the company. 2. Find the opportunity cost of the company. ****** ********** A company sells a product with a unite price of $10. Each unit costs $4.48. The total number of sold units for the current year is 1,000 units. The company is financed with $6,000 as equity and $4,000 as debt, and the corporate tax rate is 20%. After careful investigation, you conclude that: ROIC: NOPLAT Invested capital Where NOPLAT stands for the Net Operating profit Less Adjusted Taxes. Besides, the company practice a linear depreciation on its non-current assets (NCA) that constitutes up to 60% of the total assets. The lifetime of NCA is 5 years. Moreover, the company pays 8% as interest on its debt. The board of the directors of the company decides to distribute 72% of the net income as dividend to shareholders, which corresponds to their requirement. 1. Find the ROIC of the company, assumed to keep unchanged during the life of the company. 2. Find the opportunity cost of the company. ****** **********

Answer rating: 100% (QA)

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