Instructions

1. Using the financial statements shown here for Lan & Chen Technologies, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for 2020. The federal-plus-state tax rate is 25%.

2. Assume there were 15 million shares outstanding at the end of 2019, the year-end closing stock price was $65 per share, and the after-tax cost of capital was 10%. Calculate EVA and MVA for 2020.

Lan & Chen Technologies: Income Statements for Year Ending December 31 (Millions of Dollars)

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