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Task 2: The company, in its first year, made profit after deduction of tax but before deduction of interest of $1,000,000. The amount invested by
Task 2: The company, in its first year, made profit after deduction of tax but before deduction of interest of $1,000,000. The amount invested by debt holders was $4,000,000. Equity holders also invested $4,000,000. Interest paid during the year was $240,000 and the weighted average cost of capital is 8%, while the cost of equity capital is 10%. a) Calculate the return on invested capital. b) Calculate the company's economic profit
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