Question: Explain the effect of net PPE on ROIC Is it
Explain the effect of net PPE on ROIC. Is it always better for firms to run lower levels of net PPE? Explain.
Answer to relevant QuestionsWould you expect a firm's annual free cash flow to be greater than or less than NOPAT in a given year? Explain. What is the advantage of comparing a stock to one or two key competitors instead of the industry average? Calculate UTX's return on assets and return on equity using the 3-step DuPont decomposition for each year 2010-2012. Calculate the present value of UTX's free cash flows for each year 2010-2012. Use the WACC calculated in problem 31 and a long-term growth rate of 3.0%. Identify the limitations of the historical analysis presented in Chapter 4, and explain how Chapter 5 extends the analysis framework to overcome these limitations
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