In this workout, Printer has acquired Fax for 2,000 And we're asked to calculate the return on beginning invested capital one year post deal In order to do tis, we'll need to start off with Faxes' EBIT and calculate their NOPAT Then add onto that the synergies post tax to get to our NOPAT adjusted for synergies We'll then need to calculate the invested capital, which will be the acquisition enterprise value So we start with Faxes' EBIT There it is,150! But I now need to take off tax and it's going to be the effective tax rate we use here to adjust down to NOPAT So I take EBIT, times it by one minus the effective tax rate giving me 105 Next up, we need to find synergies post tax The synergies that we had in year one is given up in the question was 50 But I now need to find that post tax, so I take the marginal tax rate this time And I take the 50 times by one minus the tax rate to get to synergies post tax So my NOPAT adjusted for synergies is the 105 and I add on the synergies post tax Next up we need to work out the acquisition enterprise value We start with the acquisition value which was 2,000 given to us in the question And then we add on Faxes' existing net debt of 40 Add those two together gets us the acquisition enterprise value at the beginning value of 2,400 I've now got everything I need to calculate the ROIC Take the adjusted NOPAT, divide it by the enterprise value and I get 5.7% Now interestingly let's compare that to the WACC and Faxes' WACC is unfortunately is 7% So we're going to have to see if there's anything we can do to try and improve that ROIC