The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The Blazer Company's EPS last year, EPSo, was $1.50. Blazer expects sales to increase by 15% during the coming year. If Blazer has a degree of operating leverage equal to 1.25 and a degree of financial leverage equal to 3.50, then what is its expected EPS or EPS₁? Hint: First, find DTL where DTL= DOL x DFL. Note: This is a web appendix 14A topic. O $2.48 O $2.87 O $2.02 O $1.66

Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? $200,000 40% $127,500 20.0% Last year's sales = So Sales growth rate=g Last year's total assets = Ao Last year's profit margin = PM -$11,000 O O O O O a. b.-$25,571 c.-$7,000 d.-$25,000 e. -$19,000 Last year's accounts payable Last year's notes payable Last year's accruals Target payout ratio $50,000 $15,000 $20,000 25.0%

Pharoah Inc., is expected to grow at a rate of 20.000 percent for the next five years and then settle to a constant growth rate of 12.000 percent. The company recently paid a dividend of $2.35. The required rate of return is 17.000 percent.Excel Template(Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) (a) Find the present value of the dividends during the rapid-growth period if dividends grow at the same rate as the company. (Round dividends to 3 decimal places, e.g. 3.351. Round present value of dividends to 2 decimal places, e.g. 15.20.) Present value of dividends $Type your answer here

Answer 2

Question

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Answer 6

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

Answer 7

Chapter 7, Problem 26SP

a)

Summary Introduction

To determine: The net operating profit after taxes (NOPAT), total net operating capital (OpCap), free cash flow (FCF), growth rate in FCF, and return on invested capital (ROIC) for the next 3 years and FCF growth rate for Year 3 and the way it compares with the growth rate in sales and ROIC for Year 3 and the way it compare with the WACC 15%.

Answer 8

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

Answer 9

b)

Summary Introduction

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

Answer 10

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

Answer 11

c)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

Answer 12

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Answer 13

d)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Answer 14

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Answer 15

e)

Summary Introduction

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 7 - Two investors are evaluating General Electric’s...Ch. 7 - A bond that pays interest forever and has no...Ch. 7 - Explain how to use the free cash flow valuation...Ch. 7 - Ogier Incorporated currently has $800 million in...Ch. 7 - EMC Corporations current free cash flow is 400,000...Ch. 7 - Prob. 3P Ch. 7 - JenBritt Incorporated had a free cash flow (FCF)...Ch. 7 - Blunderbluss Manufacturing’s balance sheets report...Ch. 7 - Thress Industries just paid a dividend of $1.50 a...Ch. 7 - Boehm Incorporated is expected to pay a 1.50 per...

Solution Summary: The author compares the value of operations at Year 3 and the current value at 807.119. The growth in sales after year 1 is 7%, but the ROIC is lower than the WACC.

To discuss: The value of operations at Year 3 and current value of operations and compare the value of operations at Year 0 with total net operating working capital at Year 3 and explain its relationship.

To discuss: The new value of operations and whether it raises or declines and the reason for its change.

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

To discuss: The new value of operations and whether it raises or declines and the reason for its change if the CRR reduced to 60%.

Want to see the full answer?

Chapter 7 Solutions