What should the focus be in the long run

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Reference no: EM132789128

Data: In 2018, Corp. XYZ reported the following: Revenues = $52 million, COGS = $28 million, Op Exp = $6 million, Depreciation = $ 1 million, Adjusted taxes ( AT) = $12 million. Shareholder's equity = $80 million and Debt = $10 million.

Questions and Answers:

i) NOPLAT = __________ and Invested Capital or IC = ___________

ii) ROIC in 2018 = _____________

iii) If the NOPLAT in 2019 is $5.5 million, the growth rate of NOPLAT or g

g =

iv) If the WACC is 8%, using your answer in ii), explain whether the corporation is adding value or losing value. State why.

v) Given your answer to iv), what should the firm do?

vi) Now suppose the WACC is 4 %. Again, using your answer in ii) explain whether the corporation is adding value or losing value? And what should the firm do?

vii) What should the focus be in the long run? For ROIC and g?

Reference no: EM132789128

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