Question
You are an industry analyst for the energy sector. You are analyzing financial reports from two companies: Black Gold Corp. and New Energy Inc. Corporate
You are an industry analyst for the energy sector. You are analyzing financial reports from two companies: Black Gold Corp. and New Energy Inc. Corporate tax for both firms is 35%. Your associate analyst has calculated and compiled in the following table, a list of important figures you need for the analysis:
|
| Black Gold Corp. | New Energy Inc. |
| EBIT | $ 278,800 | $ 102,000 |
| Depreciation | $ 92,004 | $ 33,660 |
| Total operating capital | $ 1,224,000 | $ 636,480 |
| Net investment in operating capital | $ 612,000 | $ 265,200 |
| WACC | 11.85% | 11.88% |
What is the free cash flow and ROIC for the Black Gold Corp?
|
| a | $ -430,780 and 14.81% |
|
| b | $66,300 and 10.42% |
|
| c | $181,220 and 14.81% |
|
| d | $-198,900 and 10.42% |
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