Use the Following Table, Which Provides Historical Data for SnacksCo

question 2

Multiple Choice

Use the following table, which provides historical data for SnacksCo, a manufacturer of snack foods, to answer the next question. Assume an operating tax rate of 30 percent and a cost of capital of 9 percent.
$\begin{array}{lcc}\text { Income statement } & \text { Year 1 } & \text { Year 2 } \\\hline \text { Revenues } & 540.0 & 555.0 \\\text { Cost of sales } & (350.0) & (360.5) \\\begin{array} { l } \text { Selling, general, and}\\ \text {administrative }\\\end{array}&(50.0) &(50.5) \\\text { Depreciation } & (10.0) & (10.5) \\ \text { EBIT } & 130.0 & 133.5 \\\text { Interest expense } & (7.5) & (7.5) \\\text { Gain/(loss) on sale of assets } & - & (30.0) \\\text{ Earnings before taxes } & 122.5 & 96.0 \\\text { Taxes } & (24.8) & (21.5) \\\hline \text { Net income } & 97.7 & 74.5\\\end{array}$
$\begin{array}{lcc}\text { Balance sheet } & \text { Year 1 } & \text { Year 2 } \\\hline\text { Operating cash } &10.6 & 15.0 \\ \begin{array}{l}\text { Excess cash and marketable } \\\text { securities }\end{array} & 102.8 & 100.0 \\\text { Accounts receivable } & 90.0 & 94.5 \\\text { Inventory } & 150.0 & 157.5 \\\text { Current assets } & 353.4 & 367.0\\\text { Property, plant, and equipment } & 206.7 & 219.8 \\\text { Equity investments } & 180.0 & 180.0 \\\hline \text { Total assets } & 740.1 & 766.8\\\text { Accounts payable } & 116.6 & 119.6 \\\text { Short term dobt } & 45.0 & 45.0 \\\text { Accrued expenses } & 90.1 & 89.0 \\\text { Current liabilities } & 251.7 & 253.7 \\& & \\\text { Long-term debt } & 68.4 & 80.6 \\\text { Camman stack } & 120.0 & 120.0\\\text { Retained earnings } & 300.0 & 312.5 \\ \text { Total llabilities and equity } & 740.1 & 766.8\end{array}$
-What is SnackCo's ROIC in year 2?

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Definitions:

Sensing Readiness

The ability to perceive and understand when a person, group, or system is prepared to make a change or take on a new challenge.

Attuning To Dynamic Flow

The process of adjusting or harmonizing with the changing rhythms and patterns in an environment, system, or personal experience, facilitating more effective interactions.

Major Life Change

A major life change refers to a significant transformation or transition in an individual's life, which can impact their lifestyle, relationships, or identity.

Entropy Term

A thermodynamic quantity representing the degree of disorder or randomness in a system, significant in predicting the spontaneity of processes.