Firm XYZ plans to invest $$600,000$ in a new project. This investment consists of $$400,000$ in newly

issued debt and $$200,000$ in cash on hand. The borrowing rate is $3\%,$ and the risk$-$free rate is $2\%.$ The

new investment is expected to generate $$100,000$ in EBIT for the firm, the tax rate is $20\%.$ Calculate the

economic value added $($EVA$)$ for the project.

Please present detailed calculations, as failure to do so will result in a score of $0.$ Note: Select the

appropriate equation from textbook pages $241$ and $242$ to compute the capital charge based on the

provided information."

Sarah Fluggel is considering the purchase of a home located at $2121$ Tarter Circle in Frisco, Texas. The

home has $3,000$ square feet of heated and cooled living area, and the current owners are asking a price

of $$375,000$ for it$.$

a$.$ Use the information provided in the following table to determine an initial estimate of the value of the

home Sarah is considering:

b$.$ After making her initial estimate of the value of the home, Sarah decided to investigate whether the

owner's asking price of $$375,000$ might be justified based on unique attributes of the home. What types

of details might you recommend Sarah look for in trying to justify the price of the home?

c$.$ What if the house Sarah is considering had an asking price of $$315,000?$ What would you recommend

Sarah do then?