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Chapter 10, Problem 10.13P

NPV and EVA A project costs $2,500,000 up front and will generate cash flows in perpetuity of $240,000. The firm's cost of capital is 9%.

  1. a. Calculate the project's NPV
  2. b. Calculate the annual EVA in a typical year.
  3. c. Calculate the overall project EVA and compare to your answer in part a.
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Chapter 10 Solutions

Principles of Managerial Finance, Student Value Edition Plus MyLab Finance with Pearson eText - Access Card Package (15th Edition) (Pearson Series in Finance)

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