4 For a given company next year\'s NOPLAY is $50 F percent, and the weighted ave

Question

4 For a given company next year's NOPLAY is $50 F percent, and the weighted average cost of capital For the foreseeable future, he growth race driver formula, a) $s26 b) $1,667 c 5714 d 5500 S. Which of the folowing is LEAST Ikely to result in above-average, long-run value creation? te new markets through new produets b) Acbract new customers into the market c) Convince existing customers to buy more of product. d) Gain market share from rivals through price reduction. 6 Which of the following are included in operating assets? I. Inventory . Prepaid expenses NL. Marketable securities V. Property, Plant and Equipment. a) L ll, and Iil only. b) I, , and IV only. c) II, Il, and IV only. d) t, IL, BI, and IV 7. Which of the following are operating liabilities? I. Accounts payable. Il. Accrued salaries Ill. Deferred revenue. IV. Short-term debt. a) I and II only b) Il and Ilil only c) 1, I1, and ill only d) L, II, III, and IV Answer- $800, revenues $2,200, invested capital $4,00 8. Compute ROIC given the following information: operating profit cash tax rate = 34%. a) 6.8 percent. b) 13.2 percent. c) 24.0 percent. d) 36.3 percent. Answer

Explanation / Answer

6.

Operating Assets are in form of short term assets which is denoted as current Assets.Items in current assets include Cash, Account receivables, prepaid expenses, Inventory, and other current assets.

So, option (I), (II) and (III) are correct answer.

7.

Operating liabilities are in form of short term liabilities which is denoted as current liabilities. the life of these liabilities are maximum one year. Current liabilities includes, Short term debt, account payables, accrues expenses , deferred revenue and other current liabilities.

So, all of the given options are part of operating liabilities.

8.

After tax operating profit = $800  × (1 - 34%)

= $528.

Return on capital employed = After tax operating profit / Invested capital

= $528 / $4,000

= 13.20%

Return on capital employed is 12.20%.

Option (B) is correct answer.

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