One analyst is trying to estimate the growth rate for Spirit Co. for the following 5 years, and he has obtained the following information in the most recent financial year:

EBIT	$200 million
Book value of capital	$1000 million
Capital expenditures	$150 million
Depreciation	$80 million
Change of non-cash working capital	$20 million

The tax rate has been always fixed at 30%.

1. Estimate the expected growth rate for the next 5 years given both ROC and reinvestment rate will be unchanged.

2. If ROC on new investments will immediately jump to 25% and ROC on existing investments will gradually improve to 25% over the next 5 years, estimate the growth rate on new investments, growth rate on efficiency, and total growth rate.

3. How would you deal with the temporarily and long-run negative reinvestment rates?