A New project is considered. The project will operate for 10 years beginning next year.

Production cost will be 4 per tonne. Annual production will be 10 tonnes. Production will commence in Year 1 and continue for 10 years.

Gross profit margin will be 60%.

Selling, General and Admin expenses will be 20 in Years 1 to 10.

In Year-0, a one-time cost of 40 is required for licensing, legal fees and so on. Similarly a one-time cost of 8 must be incurred in Year-1. In both cases these costs must be expensed when incurred.

Year-0 CAPEX is 120. It will be straight-line depreciated over the life of the project.

A clean-up cost of 10 must be paid in Year-11 (think of this as additional CAPEX)

Customers will pay 3 months after receiving their hydrogen.

The tax rate is 25% and the annual cost of capital is 10%.

What is the ROIC (return on invested capital) for years 1,2 and 3? Is ROIC useful here?