what is the market value of invested capital 623324

You have been asked to value Pacific Corporation, Inc., using an excess earnings method, given the following information:

• Working capital balance = $2,000,000

• Fair value of fixed assets = $5,500,000

• Book value of fixed assets = $4,000,000

• Normalized earnings of firm = $1,000,000

• Required return on working capital = 5.0 percent

• Required return on fixed assets = 8.0 percent

• Required return on intangible assets = 15.0 percent

• Weighted average cost of capital = 10.0 percent

• Long-term growth rate of residual income = 5.0 percent

Based on this information:

a. What is the value of Pacific’s intangible assets?

b. What is the market value of invested capital?