11. Evaluating free cash flows and return on invested capital Aa Aa You're an industry analyst for the telecomm sector, and have been analyzing financial reports from two companies Talker Corp. and MobileTalk Inc. The corporate tax rate for both firms is 35%. Your associate analyst has calculated and compiled, in the following table, a list of important figures you'll probably need for the analysis Data Collected EBIT Depreciation Total operating capital Net investment in operating capital WACC Talker Corp $160,000 $64,000 $940,800 $448,000 8.84% MobileTalk Inc. $113,920 $45,568 $734,080 $236,800 11.50% In your analysis, you want to look for several characteristics-one of them being the return on invested capital (ROIC). Using the information available, complete the following statements: The net operating profit after tax (NOPAT) for Talker Corp. is , whereas the NOPAT for MobileTalk Inc. is Talker Corp. has a free cash flow of , whereas, MobileTalk Inc. has a free cash . Talker Corp. has a return on invested capital than MobileTalk Inc. has Your inference from the analysis is that both firms are in a high-growth phase, and their growth will be profitable. Considering your analysis, which of the following statements is true? If a company has positive NOPAT but a negative free cash flow, then the firm could be in a high-growth phase and making investments in operating capital to support growth O If a company has negative NOPAT but a positive free cash flow, then the firm could be in a high-growth phase and making investments in operating capital to support growth