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Firms A, B, and C record the results that are presented in the following table. Calculate for each company the ROIC (%) and FCF =
Firms A, B, and C record the results that are presented in the following table. Calculate for each company the ROIC (%) and FCF = NOPAT - i. Assume that the WACC is 12.5% and that the amount of capital invested in each company is $ 1,200 in Company A, $ 900 in Company B, and $ 700 in Company C.
A | B | C | |
NOPAT ($) | 200 | 200 | 200 |
Growth rate (g) | 8% | 12% | 18% |
Net investment /NOPAT | 90% | 80% | 25% |
Net investment ($) | $180 | $160 | $50 |
Increase in NOPAT ($) | $16 | $24 | $36 |
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