Begin with the partial model in the file Ch02 P21 Build a Model.xlsx on the textbook?s Web site.

a. Using the financial statements shown here for Lan & Chen Technologies, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for 2020. The federal-plus-state tax rate is 25%.

b. Assume there were 15 million shares outstanding at the end of 2019, the year-end closing stock price was $65 per share, and the after-tax cost of capital was 10%. Calculate EVA and MVA for 2020.

Lan & Chen Technologies: Income Statements for Year Ending December 31 (Millions of Dollars) 2020 2019 Sales $945,000 $900,000 Expenses excluding depreciation and amortization 812,700 $132,300 774,000 $126,000 EBITDA 33,100 $ 99,200 10,400 $ 88,800 22,200 $ 66,600 31,500 $ 94,500 8,900 $ 85,600 21,400 $ 64,200 Depreciation and amortization EBIT Interest expense Pre-tax earnings Taxes (25%) Net income $ 43,300 $ 23,300 $ 41,230 $ 22,970 Common dividends Addition to retained earnings Lan & Chen Technologies: December 31 Balance Sheets (Thousands of Dollars) 2020 2019 Assets $ 47,250 $ 45,000 3,600 270,000 135,000 $453,600 315,000 $768,600 Cash and cash equivalents Short-term investments 3,800 283,500 141,750 $476,300 330,750 $ 807,050 Accounts receivable Inventories Total current assets Net fixed assets Total assets Liabilities and Equity Accounts payable Accruals $ 94,500 47,250 $ 90,000 45,000 Notes payable Total current liabilities Long-term debt Total liabilities 17,400 $ 159,150 90,000 $ 249,150 $444,600 9,000 $144,000 90,000 $234,000 $444,600 90,000 $534,600 $768,600 Common stock Retained earnings Total common equity Total liabilities and equity 113,300 $ 557,900 $ 807,050