Question
Need answer ASAP. 1. Why is profitability considered via RNOA rather than just looking at NOPAT? 2. Currently, Littleton has $220 million in NOAand $440
Need answer ASAP.
1. Why is profitability considered via RNOA rather than just looking at NOPAT?
2. Currently, Littleton has $220 million in NOAand $440 million in annual sales generating a NOPAT, of $33 million. Littletons management group believes expanding international would result in incremental sales of $90 million requiring an investment in additional NOA, including supporting working capital, of $30 million. Due to a substantial marketing effort, Littleton anticipates its international operating income, after tax, to be $6 million. Based solely on the above financial consideration, explain whether you would recommend management to expand internationally and why.
3. In what order do we form forecasts?
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