Question
I know how to calculate the ROI, residual income and EVA for the following: Company looking at investing in equipment that costs $105,000. Old equipment
I know how to calculate the ROI, residual income and EVA for the following:
Company looking at investing in equipment that costs $105,000. Old equipment can be sold for $2000, has book value of $50,000. Annual rate of return is 20%, tax rate is 30%. Companies current info is as follows:
Sales 500,000
# of units sold 250,000
Contribution margin 260,000
Direct fixed costs 59,520
Average net operating assets 320,000
WAC of capital 17%
Considering the investment, how do i calculate the ROI, residual income and EVA? or does it not impact the ROI, residual and EVA?
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