E$.$ Use the following assumptions to answer the questions below: $(1)$ Operating ratios remain unchanged. $(2)$ Sales will grow by $11\mathrm{.}1\%,8\%,5\%,$ and $5\%$ for the next four years. $(3)$ The target weighted average cost of capital $($WACC$)$ is $10\%.$ This is the No Change scenario because operations remain unchanged.

$1.$ For each of the next four years, forecast the following items: sales, cash, accounts receivable, inventories, net fixed assets, accounts payable & accruals, operating costs $($excluding depreciation$),$ depreciation, and earnings before interest and taxes.

$2.$ Using the previously forecasted items, calculate for each of the next four years the net operating profit after taxes $($NOPAT$),$ net operating working capital, total operating capital, free cash flow, $($FCF$),$ annual growth rate in FCF$,$ and return on invested capital. What does the forecasted free cash flow in the first year imply about the need for external financing? Compare the forecasted ROIC compare with the WACC. What does this imply about how well the company is performing?