Corporate Finance England Topic Test

Hi guys,

In the England Topic Test, they use real WACC to calculate Economic Profit. Any reason why? Then even mention a .78% inflation assumption for the projected cash flows. They also give out all the necessary input to calculate WACC. Do you guys have any tips on how to determine if you have to take the rates as given in those types of problems or if you have to take the inputs and calculate the rates yourself? I mean you could do it both ways…Thanks!

Look at the left side the table, datapoints are inflation adjusted (-Inflation) hence real wacc should be used.

Did not see that! Thanks man!