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A firm has an average investment of $20,000 during the year. During the same period, the firm generates an after-tax income of $5,000. The cost

A firm has an average investment of $20,000 during the year. During the same period, the firm generates an after-tax income of $5,000. The cost of capital is 20 percent.

a) Calculate the economic value added (EVA) for the firm.

b) Calculate the net return on the investment (ROI) for the firm.

Show all work and calculations. Please no handwritten answers or Excel.

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