Question: Computing, Analyzing and Interpreting Residual Operating Income (ROPI) In its annual report for the fiscal year ended July 27, 2019, Cisco Systems reports the following

Computing, Analyzing and Interpreting Residual Operating Income (ROPI)

In its annual report for the fiscal year ended July 27, 2019, Cisco Systems reports the following ($ million):

July 27, 2019
Net operating profit after tax (NOPAT) $6,808
Net operating assets (NOA) beginning $13,335

Assuming the following weighted average cost of capital (WACC), what is Cisco's residual operating income (ROPI) for the fiscal year ended July 27, 2019?

WACC
7.6%

ROPI Answer

b. At what level of WACC would Cisco not report positive residual operating income for the year?

WACC Answer

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