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2. A firm plans to buy an asset for $100,000 and will completely depreciate the asset on a straightline basis over two years. Operating cash

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2. A firm plans to buy an asset for $100,000 and will completely depreciate the asset on a straightline basis over two years. Operating cash flow from this asset will be $60,000 in each of the next two years. The cost of capital is 8%. a. What is the investment's NPV? (0.75 Mark) b. What is the economic value-added (EVA) cash flow in years one and two? (0.75 Mark) c. What is the project's EVA over its life? (0.75 Mark) d. How do your answers to (a) and (c) compare? ( 0.75 Mark)

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