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Assume that you proposed business in you proposed business plan will generate in the first year a net income of $600, taxable income of $1,000,
Assume that you proposed business in you proposed business plan will generate in the first year a net income of $600, taxable income of $1,000, operating profit of $1,200, total financial capital including both debt and equity of $9,000, and that all taxes amount to a marginal tax rate of 40%. You are faced with a weighted cost of capital (WACC) assessed to be 10%. Prove that your ventures EVA = a loss of $280,000
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