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For the current year, Mo-Z Manufacturing estimates that its Return on Invested Capital (ROIC) is 9% and its Weighted Average Cost of Capital (WACC) is
For the current year, Mo-Z Manufacturing estimates that its Return on Invested Capital (ROIC) is 9% and its Weighted Average Cost of Capital (WACC) is 11%. (6 points each)
a. Do you expect Mo-Zs Economic Value Added (EVA) to be positive or negative or is it ambiguous? Explain.
b. Do you expect Mo-Zs Market Value Added (MVA) to be positive or negative or is it ambiguous? Explain.
c. Is the proper focus of management EVA, MVA, profit, growth, or some other measure? Explain.
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