# A certain investment requires an initial outlay of $12 million and subsequently produces annual cash inflows of $1.4 million in perpetuity. A firm evaluating this investment uses a discount rate of 10%. What is the investment's NPV? What is the EVA each period? What is the present value of the stream of EVAs?

A certain investment requires an initial outlay of $12 million and subsequently produces annual cash inflows of $1.4 million in perpetuity. A firm evaluating this investment uses a discount rate of 10%. What is the investment's NPV? What is the EVA each period? What is the present value of the stream of EVAs?

Discount Rate

Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...

Discount Rate

Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...

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## Introduction to Corporate Finance What Companies Do

3rd edition

**Authors:** John Graham, Scott Smart

**ISBN:** 978-1111222284