The attached financial statement information pertain to W.W. Grainger (GWW). The stock is currently selling for roughly $193 per share. First, compute GWW's CASH CONVERSION CYCLE and RETURN ON INVESTED CAPITAL (ROIC) for 2016. Remember that a firm's tax rate is simply its tax expense divided by its pre-tax income, or in GWW's case 37.9%. Round to the nearest 2 decimal places.

We are considering investing in GWW and would like to achieve a 10% annual rate of return on our investment. Given GWW's current stock price, what is the most we would be willing to pay for GWW if we assume they can grow thier free cash flow by 10% per year for the next 5 years, and then 3% in perpeturity?

W.w. Grainger, Inc. Subsldiaries (in CONSOLIDATED STATEMENTS OF EARNINGS thousands of dollars, except for share and per share amounts) For the Years Ended December 31. 2016 Net sales Text 2015 10,137,204 Cost of merchandise sold 9,973.384 S 6,022,647 5.741.956 Gross profit warehousing, marketing and administrative expenses 4,114,557 4,231,428 2,995,060 2,931,108 Operating eamings 1,119,497 other Income and (expense): 300,320 Interest Income 1,166 Interest expense Loss from equity method investment (31.193) (11.740) Other non-operating Income Other non-operating expense (4,931) (6,572 Total other expense (100,439) A9,615 Eamings before income taxes 1.250,705 1.019.058 Income taxes 465,531 388,220 Net eamings 632,838 785,174 Less: Net earnings attributable to noncontrolling interest 26,910 16,178 Net earnings attributable to w.w. Grainger, Inc. 605,928 768.996 Eamings per share Basic 9.94 11.69 Diluted 11.58 9,87 Weighted average number of shares outstanding Basic 60,430,892 65.156, B64 Diluted 60,839,930 65,765,121 The accompanying notes are an integral part of these consolidated financial statements. 41 2014 9,964,953 5,650,711 4,314,242 967.325 1.347.117 2.068 (5,189) (12,731) 1.334.386 622,080 812.296 10,567 801,729 11.59 68.334 322 69,205,744