Assume a project costs $860,000 initially and will generate cash flows in perpetuity of $320,000. The firms
Question:
Assume a project costs $860,000 initially and will generate cash flows in perpetuity of $320,000. The firm’s cost of capital is 12%.
a. Calculate the project’s NPV.
b. Calculate the annual EVA in a typical year.
c. Calculate the overall project EVA and compare to your answer in part a.
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Related Book For 
Principles Of Managerial Finance
ISBN: 9781292018201
14th Global Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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