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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