Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help with letters e,f,g based on the info above. --- Data: In 2019, Corp. ABD reported the following: Revenues = $69 million, COGS =

image text in transcribed
image text in transcribed
please help with letters e,f,g based on the info above.
--- Data: In 2019, Corp. ABD reported the following: Revenues = $69 million, COGS = $30 million, Operating Expenses = $21 million, Depreciation = $ 2 million, Adjusted taxes (AT) = $8 million. Shareholder's equity = $75 million and Debt = $6 million. By Para a) NOPLAT $8.00 and invested Capital $81.00 (69 30 21-2-8)=8 (75+6_81 b) ROIC in 2020 9.88% (8/81) 9.88% c) If the NOPLAT in 2020 is $8.2 million, the growth rate of NOPLATO 2.50% (8.2/8 1) 2.50% d) If the WACC is 8%, using your answers above, explain whether the corporation is adding value or losing value. Explain rationale dearly in 1-2 sentences The corporation is adding value because if you subtract the capital from the NOPLAT and multiply you'll get a positive answer of $1.72. c) Given your answer to d) should the corporation focus on increasing the growth rate ? Explain rationale chearly in 1-2 sentences, 1) Suppose the WACC now increases to 11%. Given your answers abowe what should the fir do now? What should it focus on? Explain tationale dearly (1.2 sentences). R) What should the focus of the firm be in the long run? (1-2 sentences to explain rationale)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance

Authors: Angelico Groppelli, Ehsan Nikbakht

2nd Edition

0812043731, 978-0812043730

More Books

Students also viewed these Finance questions

Question

Able to describe variations in rewards practices.

Answered: 1 week ago