How sensitive is return on capital to the forecastassumptions in case Exhibit 8? What independentchanges in Carrie Galeotafiore's estimates are requiredto drive the 2002 return - on - capital estimate belowHome Depot's cost - of - capital estimate of 12.3%?Look specifically at gross margin, cash operatingexpenses, receivable turnover, inventory turnover, andP&E turnover. What effect does sales growth have onreturn of capital? Explain your findings.
How sensitive is return on capital to the forecastassumptions in case Exhibit 8? What independentchanges in Carrie Galeotafiore's estimates are requiredto drive the 2002 return - on - capital estimate belowHome Depot's cost - of - capital estimate of 12.3%?Look specifically at gross margin, cash operatingexpenses, receivable turnover, inventory turnover, andP&E turnover. What effect does sales growth have onreturn of capital? Explain your findings.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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How sensitive is return on capital to the forecastassumptions in case Exhibit 8? What independentchanges in Carrie Galeotafiore's estimates are requiredto drive the 2002 return - on - capital estimate belowHome Depot's cost - of - capital estimate of 12.3%?Look specifically at gross margin, cash operatingexpenses, receivable turnover, inventory turnover, andP&E turnover. What effect does sales growth have onreturn of capital? Explain your findings.
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