Question
Here are data on two firms: Equity ($ million) Debt ($ million) ROC (%) Cost of Capital (%) Acme 260 90 16 10 Apex 300
Here are data on two firms:
| Equity ($ million) | Debt ($ million) | ROC (%) | Cost of Capital (%) | |||||||||
| Acme | 260 | 90 | 16 | 10 | ||||||||
| Apex | 300 | 200 | 14 | 11 | ||||||||
a-1. Calculate the economic value added? (Do not round intermediate calculations. Enter your answers in millions)
a-2. Which firm has the higher economic value added?
-
Apex has higher economic value added
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Acme has higher economic value added
b-1. Calculate the economic value added per dollar of invested capital? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b-2. Which has higher economic value added per dollar of invested capital?
-
Acme has higher economic value added per dollar of invested capital
-
Apex has higher economic value added per dollar of invested capital
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Financial Accounting For Decision Makers
Authors: DeFond, Mark
3rd Edition
1618534432, 9781618534439
