NPV and EVA For the following investment opportunities, the only investment required is the initial outlay...
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NPV and EVA For the following investment opportunities, the only investment required is the initial outlay at time 0 and the cost of capital is 6%. Assume straight-line depreciation in years 1 through 6 for each project. 2 a. Calculate the NPV for investment 1 and 2. b. Calculate the annual EVA for investment 1 and 2. c. Calculate the project EVA for investment 1 and 2. d. Based on the NPV and EVA analysis are these investments acceptable? a. The NPV of investment 1 is $ (Round to the nearest cent.) Initial Outlay Year 1 2345 6 Investment 1 - $220,000 Investment 2 - $410,000 Operating Cash inflows $81,000 $66,000 $32,000 $81,000 $97,000 $106,000 $43,000 $68,000 $86,000 $102,000 $126,000 $143,000 NPV and EVA For the following investment opportunities, the only investment required is the initial outlay at time 0 and the cost of capital is 6%. Assume straight-line depreciation in years 1 through 6 for each project. 2 a. Calculate the NPV for investment 1 and 2. b. Calculate the annual EVA for investment 1 and 2. c. Calculate the project EVA for investment 1 and 2. d. Based on the NPV and EVA analysis are these investments acceptable? a. The NPV of investment 1 is $ (Round to the nearest cent.) Initial Outlay Year 1 2345 6 Investment 1 - $220,000 Investment 2 - $410,000 Operating Cash inflows $81,000 $66,000 $32,000 $81,000 $97,000 $106,000 $43,000 $68,000 $86,000 $102,000 $126,000 $143,000
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a Calculate the NPV for investment 1 and 2 The NPV is calculated by discounting each cash flow to its present value and summing them up The formula fo... View the full answer
Related Book For
Finite Mathematics And Its Applications
ISBN: 9780137616619
13th Edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel , Jill Simmons
Posted Date:
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