How does the value of operations compare with the current


Your employer also is considering. the acquisition of Hatfield Medical Supplies. You have gathered the following data regarding Hatfield. with all dollars reported in millions. 1.) most recent sales of $2,000.   2.)most recent. total net operating capital, OpCap=$1,120; 3.) most recent operating profitability ratio OP=NOPAT/Sales=4.5% and 4.) most recent capital requirement ratio, CR=OpCap/Sales=56%. You estimate that the growth. rate in sales from year 0 to year 1 will be 10% from year 1 to year 2 will be 8% from year 2 to year 3 will be 5% and from year 3 to year 4 will be 5%. you also estimate that the long-term growth rate beyond year 4 will be 5%. assume the operating profitability. and capital requirement ratio will not change. use this information to forecast Hatfield's sales net operating profit after taxes (NOPAT) OpCap, free cash flow and return. on invested capital (ROIC) for year 1 through 4. the weighted average cost of capital (WACC) is 9%. How does the ROIC in year 4 compare with the WACC? What is the horizon value at year 4? what is the total net operating capital at year 0? how does the value of operations compare with the current total net operating capital?

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Financial Management: How does the value of operations compare with the current
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