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In 2021, Alex Morgan LLC had the following: Earnings Before Interest & Taxes $ 100,000 Effective Tax Rate 13.0% Increase in Net Working Capital $
In 2021, Alex Morgan LLC had the following: | |||||
Earnings Before Interest & Taxes | $ 100,000 | ||||
Effective Tax Rate | 13.0% | ||||
Increase in Net Working Capital | $ 20,000.0 | ||||
Depreciation | $ 5,000 | ||||
Capital Expenditures | $ 6,000 | ||||
Assuming you are an Analyst calculating ROIC using FCFF as | |||||
your measure of economic income, and you calculate | |||||
ROIC to be 12.50%, then what was Morgan's Average Invested Capital? | |||||
Put answer in cell A137 | |||||
Alex Morgan LLC's Chief Financial Officer, Mackenzie Dern, analyzed | |||||
one of Morgan's competitors. She found that the competitor had | |||||
Average Invested Capital of $600,000 in 2021. She said the | |||||
Company had FCFF of $50,000; FCFE of $40,000; and that their WACC was 10.0%. | |||||
She asked you what their EVA would be? | |||||
A. | 10,000 | ||||
B. | 20,000 | ||||
C. | (20,000) | ||||
D. | (10,000) |
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