Projecting NOPAT and NOA Using Parsimonious Forecasting Method Following are Cis
ID: 2524099 • Letter: P
Question
Projecting NOPAT and NOA Using Parsimonious Forecasting Method
Following are Cisco Systems’ sales, net operating profit after tax (NOPAT), and net operating assets (NOA) for its year ended July 31, 2016 ($ millions).
Use the parsimonious method to forecast Cisco’s sales, NOPAT, and NOA for years 2017 through 2020 using the following assumptions.
for 2017 and
thereafter
Rounding instructions:
Round total revenue "unrounded" to two decimal places.
Round total revenue "rounded", NOPAT and NOA answers to the nearest whole number.
For NOPAT and NOA computations, use total revenue "rounded".
$ millions
Sales $49,247 Net operating profit after tax (NOPAT) 10,575 Net operating assets (NOA) 26,472Explanation / Answer
2016 2017 2018 2019 2020 Total revenue (Unrounded) $49,247 $49,739 $50,734 $51,749 $52,784 Total revenue (Rounded) $49,247.00 $49,739.47 $50,734.26 $51,748.94 $52,783.92 Net operating profit after tax (NOPAT) $10,575 $10,694 $10,908 $11,126 $11,349 Net operating assets (NOA) $26,472 $26,742 $27,276 $27,822 $28,378
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