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Herbal Resources is a small but profitable producer of dietary supplements for pets. This is not a high-tech business, but Herbal's earnings have averaged around
Herbal Resources is a small but profitable producer of dietary supplements for pets. This is not a high-tech business, but Herbal's earnings have averaged around $2.2 million after tax, largely on the strength of its patented enzyme for making cats nonallergenic. The patent has eight years run, and Herbal has been offered $3 million for the patent rights. Herbal's assets include $3 million of working capital and $7.5 million of property, plant, and equipment. The patent is not shown on Herbal's books. Suppose Herbal's cost of capital is 17% What is its EVA? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) EVA milion
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