What is the optical wc by rev

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Firm value based approach- illustration

Current year Revenue: INR 500 crores

Earnings before Interest and after Tax (EBIAT) or Net Operating Profit after Tax (NOPAT): 10%

Present investment in WC: zero

Present Growth rate in operating income: 5%

Current cost of capital: 15%

Cost of Capital drops by 0.10% for every 10% increase in WC/Revenue

Growth rate in revenue and EBIAT: 6%,6.5% ,6.83% and 6.93% when WC/Rev is 10%,20% , 30% and 40% respectively.

Problem 1: Ignore delta capex depreciation and amortization. What is the optical WC/Rev % (0%,10%,20%,30%,40%) calculations required for all

Reference no: EM132635988

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