The ROIC in year 4 is 8.04% which is less than the value of the WACC which is 9% this means that the return on the project is lower than the cost of funding it meaning value is being decresaed. 图...

1. What is the horizon value at Year 4? What is the total net operating capital at Year 4? Which is larger, and what can explain the difference? What is the value of operations at Year 0? How does the Year-0 value of operations compare with the Year-0 total net operating capital?

Extracted text: The ROIC in year 4 is 8.04% which is less than the value of the WACC which is 9% this means that the return on the project is lower than the cost of funding it meaning value is being decresaed. 图 NOPAT/Sales 4.5 % ОРСАР/Sales 56 % WACC 9% Year 1 2 3 4 Growth rate 10% 8% 5% 5% 5% Sales 2000 2200 2376 2494.8 2619.54 Sales(year1) =Growth rate *sales(Year0) NOPAT 90 99 106.92 112.266 117.8793 Ор сapital 1120 1232 1330.56 1397.088 1466.942 Increase op 112 98.56 66.528 69.8544 сapital Free cash flow -13 8.36 45.738 48.0249 Ecf=NOPAT- increase in operating capital Continuation 1260.654 value Cont. Value= (FCFyear4* (1+g))/(WACC- g) 957.52 1056.706 1143.45 1200.623 88 PV 1043.706 1151.81 1246.361 1308.679 ROIC 8.04% 8.04% 8.04% 8.04% ROIC=NOPAT/ OPCap Growth in FCF 164% 447% 5%