NPV and EVA For the following investment opportunities the only investment required is the initial outlay, the
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NPV and EVA For the following investment opportunities the only investment required is the initial outlay, the investment capital will be evenly depreciated over the six-year investment life, and the cost of capital is 11%.
a. Calculate the NPV for each investment.
b. Calculate the annual EVA for each investment.
c. Calculate the project EVA for each investment.
d. Based on the NPV and EVA analysis are these investments acceptable?
Transcribed Image Text:
Initial Outlay Year 12 3 456 Investment 1 - $260,000 Investment 2 - $450,000 Operating Cash Inflows $ 84,000 69,000 35,000 78,000 95,000 105,000 $ 45,000 65,000 85,000 105,000 125,000 145,000
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Related Book For
Principles Of Managerial Finance
ISBN: 9781292400648
16th Global Edition
Authors: Chad Zutter, Scott Smart
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