Assume that a company is going to invest 900,000 USD in a new project. We expect...
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Assume that a company is going to invest 900,000 USD in a new project. We expect that the invested capital in the fixed assets will be fully depreciated within 3 years in a linear way. The project is assumed to generate the cash flows 350.000 USD every year. The weighted average cost of capital is 12%. Assume that NOPAT is the difference between the cash flow in each year and the annual depreciation. Compute EVA in each year. Assume that a company is going to invest 900,000 USD in a new project. We expect that the invested capital in the fixed assets will be fully depreciated within 3 years in a linear way. The project is assumed to generate the cash flows 350.000 USD every year. The weighted average cost of capital is 12%. Assume that NOPAT is the difference between the cash flow in each year and the annual depreciation. Compute EVA in each year.
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To compute Economic Value Added EVA for each year we need to follow these steps 1 Calculate the ... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780137689453
1st Edition
Authors: Jennifer Cainas, Celina J. Jozsi, Kelly Richmond Pope
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