None A company carries an averageannual inventory of $3 million if itestimates the cost of capital is 10%so much costs are 7% and risk callsare 6%. What does it cost per yearto carry this inventory?

Step 1: Introduction to the Annual Inventory"Annual inventory" is a term related to business…

Answered: A company carries an average annual…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%?a. What are the projected sales in Years 1 and 2?b. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? c. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2?d. What is the projected FCF for Year 2?
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A company carries an average annual inventory of $3 million if it estimates the cost of capital is 10% so much costs are 7% and risk calls are 6%. What does it cost per year to carry this inventory?