Question 1 Not complete Marked out of 100.00 Estimating Share Value Using the ROPI Model Assume the following are the income statement and balance sheet for Intel Corporation. INTEL CORPORATION Consolidated Statements of Income Dec. 25, 2010 Dec. 26, 2009 Dec. 27, 2008 $ 44,423 Year Ended (In millions) $ 35,127 $ 37,586 Net revenue Cost of sales 15,132 15,566 16,742 Gross margin 29,291 19,561 20,844 Research and development 6,576 5,653 5,722 7,931 Marketing, general and adminstrative 6,309 5,452 Restructuring and asset impairment charges 231 710 Amortization of acquisition-related intangibles 18 35 13,850 Operating expenses 12,903 11,890 5,711 Operating income 16,388 8,954 Gains (losses) on equity method investments, net* 117 (147) (1,380) Gains (losses) on other equity investments, net 231 (23) (376) Interest and other, net 109 163 488 7,686 Income before taxes 16,845 5,704 Provisions for taxes 4,581 1,335 2,394 $ 5,292 $ 12,264 $ 4,369 Net income *This should be considered as part of operating income. INTEL CORPORATION Consolidated Balance Sheets Dec. 25, 2010 Dec. 26, 2009 As of Year-Ended (In millions, except par value) Assets Current assets Cash and cash equivalents $5,498 $3,987 Short-term investments 11,294 5,285 Trading assets Accounts receivables, net 5,093 4,648 2,867 2,273 Inventories 3,757 2,935 Deferred tax assets 1,888 1,216 Other current assets 1,614 813 Total current assets 32,011 21,157 Property. plant and equipment, net 17,899 17,225 Marketable equity securities 1,008 773 Other long term investments** Goodwill 3,026 4,179 4,531 4,421 Other long term assets Total assets 5,111 5,340 $63,586 $53,095 Liabilities Curmet liabilities Short-term debt $38 $172 Accounts payable 2,190 1,883 Accrued compensation and benefits 2,888 2,448 Accrued advertising 1,007 773 Deferred income on shipments to distributors 622 593 1,722 Other accrued liabilities 2,482 Total current liabilities 9,227 7,591 Long-term income taxes payable 190 193 Long term debt Long term deferred tax liabilities 2,049 1,677 926 555 Other long term liabilities 1,236 1,003 Total liabilities 13,256 11,391 Stockholders' equity. Preferred stock, $0.001 par value Common stock, $0.001 par value, 10,000 shares authorized; 5,581 issued and 5,511 outstanding and capital in excess of par value 16,178 14,993 393 Accumulated other comprehensive income (loss) 333 Retained earnings 33,819 26,318 Total stockholders' equity 50,330 41,704 Total liabilities and stockholders' equity $ 63,586 $ 53,095 ** These investments are operating assets as they relate to associated companies. (a) Compute Intel's net operating assets (NOA) for year-end 2010. 2010 NOA = $ (b) Compute net operating profit after tax (NOPAT) for 2010, assuming a federal and state statutory tax rate of 37%. HINT: Gains/losses on equity method investments are considered operating income. Round your answer to the nearest whole number. 2010 NOPAT = $
