6. Superior_ _ earns a return on invested capital of 20 percent on its exist - ing stores . Given intense competition for new stores sites , you believe new stores will only earn their cost of capital . Consent quently , You set return On new capital (8 percent ; Equal to the cost of capital (8 percent ; in the con- tinuing value formula. A colleague argues that this is too conservative , as Superiorco will create value well beyond the forecast period . What is the Flaw in your colleague's argument ?"