=+If the firm separated its A division from its B division then A could be sold for

Question:

£10m and the B division would have the following Rappaport value drivers:

Sales growth rate 15%

Operating profit margin before tax 12%

Tax rate 31%

Incremental fixed capital investment (IFCI)

13% of the change in sales Incremental working capital investment (IWCI)

10% of the change in sales Planning horizon 6 years Required rate of return 14%

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